It’s all about flash PMI readings from the euro zone economies once more, giving a better idea how the region is reeling from the COVID-19 outbreak.
In the previous week, these European currencies stayed mostly in the red as downbeat commentary from officials brought bearish vibes.
Here’s what you should look out for next:
Flash PMI readings (Apr. 23, starting 8:15 am GMT)
- Readings above 50 signal expansion, below 50 reflect industry contraction
- French flash services PMI to fall from 27.4 to 25.1 in April
- French flash manufacturing PMI to drop from 43.2 to 37.9
- German flash services PMI to decline from 31.7 to 29.0
- German flash manufacturing PMI to slide from 45.4 to 39.0
- Euro zone flash services PMI to drop from 26.4 to 24.9
- Euro zone flash manufacturing PMI to slip from 44.5 to 39.4
- Weaker than expected results could drag the shared currency further south
German Ifo business climate index (Apr. 24, 9:00 am GMT)
- Level of a composite index based on surveyed manufacturers, builders, wholesalers, services, and retailers
- Decline from 86.1 to 80.0 expected in April
Overall market sentiment
- Market watchers have been more focused on coronavirus-related updates, as well as stimulus efforts, that impact risk-taking.
- The euro and franc tend to benefit from safe-haven flows as traders steer clear of the U.S. dollar.
- Here’s what governments and central banks in major economies have done so far since the coronavirus pandemic hit.
- Brexit talks with the U.K. could also impact sentiment in the region this week.
- Stochastic reveals that most euro pairs are still in bullish territory.
- In particular, EUR/GBP, EUR/CHF and EUR/AUD are oversold.
- Long-term trend strength analysis also places EUR/AUD in bullish (but weakening) territory.
- EUR/CAD and EUR/NZD are also bullish based on moving averages while the rest are on bearish grounds.
- As for CHF pairs, Williams %R shows that AUD/CHF is overbought while EUR/CHF is oversold.
- The rest of the franc pairs are looking neutral for now, at least based on this technical indicator.
Missed last week’s price action? Check out the EUR & CHF price review for April 13 – 17!