EURUSD Finding It Hard at 1.08, Despite Signs of Life in German Economy

EURUSD retraced higher today, climbing above 1.08, but the climb has stopped around this level, despite some positive signs from the German economy. The services and manufacturing PMI data for October came above expectations, which is a good thing considering activity in the services sector was slowing and heading toward stagnation.

EUR/USD Chart H4 – The 20 SMA Continues to Act As Resistance

The reports show improvement in both Germany’s and the Eurozone’s manufacturing sectors, although still below 50 points, indicating contraction. However, services sectors in both regions remain in expansion territory above 50 points, hopefully, this being the start of the turnaround. EUR/USD climbed above 1.08 but met the 20 SMA (gray) up there and is starting to reverse lower.

German Services and Manufacturing PMI Reports by HCOB – 24 October 2024

• Manufacturing PMI: 42.6 (vs. 40.8 expected, 40.6 prior) – 3-month high.
• Services PMI: 51.4 (vs. 50.6 expected, 50.6 prior) – 3-month high.
• Composite PMI: 48.4 (vs. 47.6 expected, 47.5 prior) – 2-month high.

Key Findings:

• HCOB Flash Germany Composite PMI Output Index: 48.4, a 2-month high (Sep: 47.5).
• HCOB Flash Germany Services PMI Business Activity Index: 51.4, a 3-month high (Sep: 50.6).
• HCOB Flash Germany Manufacturing PMI Output Index: 42.4, a 2-month high (Sep: 41.3).
• HCOB Flash Germany Manufacturing PMI: 42.6, a 3-month high (Sep: 40.6).

Comment:

The fourth quarter has started better than expected. There’s potential for growth as services are expanding more quickly and manufacturing is contracting at a slower pace compared to the previous month. However, despite this, the International Monetary Fund’s latest forecast predicts that GDP may remain flat for the year, following a 0.3% decline in 2023.

Eurozone Services and Manufacturing PMI Reports by HCOB – 24 October 2024

• Services PMI: 51.2 (vs. 51.5 expected, 51.4 prior).
• Manufacturing PMI: 45.9 (vs. 45.3 expected, 45.0 prior).
• Composite PMI: 49.7 (vs. 49.8 expected, 49.6 prior).

HCOB notes that:

For the second month in a row, the eurozone’s economy has experienced slight contraction, keeping it in a challenging position. Modest gains in the services sector have been mostly offset by the continued decline in manufacturing. At the national level, Germany’s economic downturn has slightly eased, but this comes as France’s situation worsens. It’s uncertain whether conditions will improve or deteriorate in the near future.

EUR/USD Live Chart

ABOUT THE AUTHOR See More

Skerdian Meta

Lead Analyst

Skerdian Meta Lead Analyst. Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.

Related Articles

No Tariffs, No Relief for the USD, While EUR, GBP, CAD, JPY All Benefit

1 hour ago

Save

Forex Signals April 18: Earnings on Good Friday Can Send DJIA Up or Down Under

11 hours ago

Save

ECB Delivers 25 bps Cut: Euro Slips While DAX Gains on Lagarde's Cautious Tone

1 day ago

Save

Comments

0 0 votes

Article Rating

Subscribe

Login

Notify of

new follow-up commentsnew replies to my comments

Please login to comment

0 Comments

Oldest

Newest Most Voted

Inline Feedbacks

View all comments