The Euro remained stable against the US dollar after both the US and Eurozone released disappointing manufacturing PMI data. The EUR/USD pair traded within a range of 1.0649 to 1.0710 over the past 24 hours.
The Hamburg Commercial Bank/S&P Global German flash manufacturing PMI increased to 42.20 in April, a two-month high from March’s 41.90, but missed expectations at 42.80. Despite the improvement, the reading still indicates a sluggish contraction.
Additionally, the HCOB German flash manufacturing PMI output index reached a three-month peak of 45 in April, up from 43.20 in March.
Likewise, the HCOB/S&P Global German Flash Services PMI increased to a ten-month high of 53.30 in April from 50.10 in March and surpassed forecasts of 50.60. The increase was driven by the robust performance of service business activity, which hit its highest level since June 2023.
In general, the HCOB German flash composite PMI output index marked a 10-month high of 50.50 in April, rising from 47.70 in March. This indicated the private-sector business activity’s slowest rate of growth.
The flash survey conducted in April revealed diverging patterns in demand scenarios across sectors. While the services sector experienced a notable increase in new business for the first time in ten months, manufacturers reported a significant and accelerated decline in the inflow of new work.
With respect to employment, a contrast emerged with an increase in workforce size within the service sector simultaneously with continued job reductions in manufacturing. Moreover, the rate of hiring in the service sector accelerated slightly, marking the second-highest pace observed in the last ten months.
Additionally, there was a marginal decrease in overall business confidence, attributed to a moderation in optimism within the service sector following March’s 25-month peak.
The HCOB/S&P Global Eurozone flash manufacturing PMI fell to a four-month low of 45.60 in April from 46.10 in March and missed forecasts of 46.50.
Also, the HCOB Eurozone flash manufacturing PMI Output Index hit a 12-month high of 47.30 in April from 47.10 in March.
The HCOB/S&P Global Eurozone flash services PMI increased to 52.90 in April from 51.50 in March and surpassed forecasts of 51.80.
Overall, the HCOB/S&P Global Eurozone flash composite PMI output index hit an 11-month high of 51.40 in April from 50.30 in March. The reported reading reflects the second consecutive month of increasing output after a continuous decrease for nine months through February.
Employment in the Eurozone expanded for the fourth consecutive month in April, following two months of marginal declines at the end of 2023.
Looking ahead, business sentiment regarding the next 12 months moderated slightly compared to March, yet remained the second-highest level recorded over the past 14 months.
The S&P Global US flash composite PMI inched down to a four-month low of 49.90 in April from 51.90 in March, disappointing economists who were expecting a reading of 52. A reading above 50 indicates expansion, and vice versa. The reading reflected an end to a three-month series of improvements to the operating environment.
Also, the US flash manufacturing output index declined to a three-month low of 51.10 in April from 54 in March.
The S&P Global US flash services PMI fell to a five-month low of 50.90 in April from 51.70 in March and missed forecasts of 52. Overall, the US PMI composite output index recorded a four-month low of 50.90 in April, compared with 52.10 in the previous month. The reported reading, reflecting 15 successive months of expansion, also signaled the slowest growth since December. Employment fell for the first time since June 2020, with the services sector bearing the brunt of layoffs.
According to the US Census Bureau, sales of new single-family houses increased 8.80% to 693,000 units in March from 637,000 units in the previous month and surpassed forecasts of 668,000.
The reported figure is 8.30% higher than the March 2023 reading of 640,000 units.
The combination of economic data from both Europe and the US is anticipated to maintain the EUR/USD pair within a narrow trading range in the short run.
The EUR/USD pair is rising after consolidating at 1.0620 levels. The next higher resistance is anticipated to be only near 1.0875. Additionally, the currency pair is trading above its 50-day moving average, while the stochastics indicator is in the bullish zone. Therefore, we anticipate the EUR/USD pair to remain in an uptrend for the next few trading sessions.
Disclaimer: Any financial trading analysis offered here is our opinion and is not intended as advice or direction for investors. We cannot guarantee the success of any trades made as a consequence of this article, and we encourage traders to incorporate a strong money management strategy to limit losses when they enter the markets. Please use this article as part of your own research before formulating strategies prior to trading.
