Eyes on Manufacturing & Services PMI today
Global markets, particularly in the US, have recovered some of last week’s losses. Investors eagerly await further economic releases later this week, which are expected to reshape the markets.
Mixed data in Europe
During this morning’s European session, Manufacturing and Services PMIs were released from France, Germany, the EU, and the UK. The outcomes were mixed.
| Indicator | Forecast | Actual | Prior |
| France Manuf. PMI | 46.9 | 44.9 | 46.2 |
| France Services PMI | 48.9 | 50.5 | 48.3 |
| German Manuf. PMI | 42.8 | 42.2 | 41.9 |
| German Services PMI | 50.6 | 53.3 | 50.1 |
| EU Manuf. PMI | 46.5 | 45.6 | 46.1 |
| EU Services PMI | 51.8 | 52.9 | 51.5 |
| UK Manuf. PMI | 50.3 | 48.7 | 50.3 |
| UK Services PMI | 53.0 | 54.9 | 53.1 |
EU equities gained momentum on the back of a better-than-expected services PMI and strong earnings, which indicated an improving economic outlook.
Eyes on US Service PMI today
Today, during the US session, the focus will be on the PMI data, which includes the Manufacturing and Services PMI. The Services PMI components, especially the Prices Paid Index, will be of particular interest as it has a significant correlation with inflation indicators.
| Indicator | Forecast | Prior |
| Manufacturing PMI | 52.0 | 51.9 |
| Services PMI | 52.0 | 51.7 |
| New Home Sales | 668K | 662K |
DXY remains strong
Technical indicators are still suggesting further declines as part of a short-term retracement before the upside trend resumes. The US Dollar Index closed yesterday’s trading with a Doji candle on the daily chart.
In the meantime, the downside retracement may continue towards 105.60. A break below this support will clear the way for a deeper retracement towards 105.50 and 105.30.
Gold below $2300
Yesterday, the price of Gold fell below multiple support levels and continued to decline during today’s trading, breaking below $2300 and reaching a low of $2291.
It seems that the market is undergoing a downside retracement, which is likely to persist for approximately two weeks. If the price drops below $2300 and stays there at the end of the day, it would indicate further declines in the future. However, there is still hope as buyers are expected to emerge around the $2270 support level. In case the price falls further, the next support is at $2260, where buyers are also likely to appear.
GBPUSD bounced off key support
GBPUSD reached its lowest level since November of last year but managed to hold above the key support level of 1.2315. Despite being heavily oversold, technical indicators suggest a potential rebound.
The chief economist of the Bank of England, Huw Pill, recently stated that the economic outlook has not changed significantly since the beginning of March. However, he suggested that rate cuts may be on the horizon. Despite this, the GBPUSD currency pair managed to bounce upwards to 1.2390 in response to Pill’s remarks. This is because his comments were not as pessimistic as the market had anticipated.
In the meantime, a stabilization above the key support level could present a long opportunity, especially considering that the technical indicators on the daily chart are heavily oversold.
Prepared by Nour Hammoury, Chief Market Analyst at SquaredFinancial
Nour is an investor, independent market strategist, and financial advisor. He holds a BA in Finance and Banking Science from Al-Ahliyya Amman University and a CFTe in Economics from the International Federation of Technical Analysts. He has more than 15 years of experience in forex, stocks, and global economic developments, as well as central bank policies and intermarket analysis. He appears regularly on major international TV networks, such as BBC, Al-Jazeera, Al Hurra, CNBC, and Bloomberg, holding open discussions and sharing insights and readings of the markets and trends.
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