An increase in the risk-off move on EUR/USD happens due to scary German & EZ PMIs, as reported by Euro Breaking News
The Eurozone’s Economic Slowdown
Euro Fundamental Backdrop
The Eurozone’s economy is slowing down, with Germany and the eurozone’s Purchasing Managers’ Index (PMI) missing estimates. The manufacturing sectors are moving further into contractionary territory, which means they are producing less. French PMI’s also showed a similar trend, which is not good news for the region. However, the services data is slightly better, which is helping to keep the overall Eurozone economy afloat.
Later today, the European Central Bank (ECB) and Federal Reserve (Fed) speakers will react to the recent data and the rather hawkish comments from Fed Chair Powell yesterday around monetary policy. The risk-off environment is likely to remain today, which means that Euro bulls will be suppressed.
The daily EUR/USD price action shows a sharp decline of roughly 0.82% down for the day. Bears have broken below the 50-day moving average (yellow) but are finding some resistance at the 1.0864 swing support level. Central bank speakers will drive volatility for the rest of the day, and it will be interesting to monitor the reaction by ECB officials to the weak PMI release.
IG Client Sentiment Data: Bearish
IG Client Sentiment (IGCS) shows that retail traders are currently short on EUR/USD, with 52% of traders currently holding short positions (as of this writing).