After Monday’s good data, the service sector PMIs also give hope to the economy
Last February, we talked about good data from Germany in relation to last year's German GDP, and good data in relation to the German investor confidence for the next six months, March has begun with positive news regarding the macroeconomic factors.
On Monday we learned of positive data regarding the manufacturing PMIs in both Europe and the United States, and today we have also seen positive results in the service sector PMIs.
Manufacturing PMIs provides information on the economic activity within the manufacturing sector, where a result above 50 indicates expansion and growth of this industry. On the contrary, a figure below 50 is considered negative, meaning the economy in this sector is contracting.
Specifically, the manufacturing PMIs exceeded both market expectations and the data of the previous month for Spain, France, Germany, the United Kingdom, and the United States. Italy was the only negative in this dataset, with a result slightly lower than expected by the market consensus, although higher than the previous month's data.
For its part, the service sector PMIs measures economic activity through purchases. As in the manufacturing PMI, a reading above 50 is considered positive suggesting good future prospects, while a reading below 50 is considered negative.
This data has been positive in Spain, Italy, France and in the eurozone as a whole, although Germany’s results were not only lower than expected by the market consensus, but it has also been worse than the previous data. The UK also performed slightly worse than expected, and data from the US will be released this afternoon.
Despite these good results, the Euro is currently down slightly more than 0.10% against the US dollar, leaving for the moment the monthly variation practically flat.
Technically speaking, if we look at the H4 chart in the EUR/USD, we can see how in recent weeks the trend has been downward after marking annual highs on January 6 at 1.23492 until losing the level of 1.20, marking lows on February 5 at 1.19521. From that moment, this pair moved within a bullish channel until its break on February 26, which led it to bounce back at the 1.20 level to make a pullback to the lower band of the channel.
After this last movement, it is important to observe if the price is able to recover this level and exceed its average of 200 in red in order to resume the uptrend or if, on the contrary, it bounces down, seeking again the annual minimums.
Source: H4 chart of EURUSD from Admiral Markets MetaTrader 5 platform from December 10, 2020 to March 3, 2021. Taken on March 3 at 12:15 CET. Note: Past performance is not a reliable indicator of future results, or future performance.
Price evolution of the last 5 years:
- 2020 = + 8.93%
- 2019 = -2.21%
- 2018 = -4.47%
- 2017 = + 14.09%
- 2016 = -3.21%
With the Admiral Markets Trade.MT5 account, you can trade Contracts for Differences (CFDs) of the AUR/USD and more than 3000 stocks! CFDs allow traders to try to profit from the bull and bear markets, as well as the use of leverage. Click on the following banner to open an account today:
INFORMATION ABOUT ANALYTICAL MATERIALS:
The given data provides additional information regarding all analysis, estimates, prognosis, forecasts, market reviews, weekly outlooks or other similar assessments or information (hereinafter “Analysis”) published on the websites of Admiral Markets investment firms operating under the Admiral Markets trademark (hereinafter “Admiral Markets”) Before making any investment decisions please pay close attention to the following:
- This is a marketing communication. The content is published for informative purposes only and is in no way to be construed as investment advice or recommendation. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and that it is not subject to any prohibition on dealing ahead of the dissemination of investment research.
- Any investment decision is made by each client alone whereas Admiral Markets shall not be responsible for any loss or damage arising from any such decision, whether or not based on the content.
- With view to protecting the interests of our clients and the objectivity of the Analysis, Admiral Markets has established relevant internal procedures for prevention and management of conflicts of interest.
- The Analysis is prepared by an independent analyst, Roberto Rojas (analyst), (hereinafter “Author”) based on their personal estimations.
- Whilst every reasonable effort is taken to ensure that all sources of the content are reliable and that all information is presented, as much as possible, in an understandable, timely, precise and complete manner, Admiral Markets does not guarantee the accuracy or completeness of any information contained within the Analysis.
- Any kind of past or modeled performance of financial instruments indicated within the content should not be construed as an express or implied promise, guarantee or implication by Admiral Markets for any future performance. The value of the financial instrument may both increase and decrease and the preservation of the asset value is not guaranteed.
- Leveraged products (including contracts for difference) are speculative in nature and may result in losses or profit. Before you start trading, please ensure that you fully understand the risks involved.
