Economic data are back in focus Tuesday, with a deluge of PMI reports from Europe and North America scheduled to make headlines. As we’ve reported before, the purchasing managers’ index (PMI) provides a broad overview of manufacturing and services activity for some of the world’s largest economies.
Between 06:45 GMT and 08:00 GMT, IHS Markit will release a spate of Eurozone PMIs covering France, Germany, Italy and the broader Eurozone. The Eurozone Composite PMI, which captures manufacturing and services conditions combined, likely edged down to 54.8 in July from 54.9 in June. Germany’s Composite Index is forecast to hold steady at 54.8.
On the PMI scale, a reading above 50 signals expansion in economic activity.
Shifting gears to North America, the Federal Housing Finance Agency (FHFA) will release the housing price index at 13:00 GMT. The May index is projected to grow 0.4% following a 0.1% uptick the month before.
Markit will release preliminary US PMI data at 13:45 GMT. The Composite Index is forecast to edge down to 56.0 from 56.2 in July.
At 14:00 GMT, the Richmond Federal Reserve Bank will release the July version of its manufacturing index. The monthly gauge is forecast to fall two points to 18.
Commodity traders will also be keeping tabs on weekly crude inventory data courtesy of the American Petroleum Institute (API). The API report is a precursor to the official data release from the US Energy Information Administration (EIA) on Wednesday.
EUR/USD
Despite showing newfound strength in recent days, EUR/USD maintains a distinctly downward bias so long as prices hold below the 1.1800 target. At the time of writing, the exchange rate is trading at 1.1692, where it was little changed compared with the previous close. In terms of technical levels, a recovery all the way past 1.1790 is needed to ignite a sustained bullish rally, according to analysts at Danske Bank. On the opposite side of the ledger, immediate resistance is found near 1.1711, which represents the 55-day MA.
GBP/USD
Cable has taken advantage of broad dollar weakness in recent days but has been unable to make a decisive break beyond the mid-1.3100 range. GBP/USD is once again trading on the cusp of 1.3100 with immediate resistance located at 1.3150. The pair is likely to find support at 1.3070.
USD/JPY
The US dollar resumed its descent against the yen on Tuesday, with the USD/JPY exchange rate sliding 0.1% to 111.20. The pair is now eyeing the 21-day simple moving average (SMA) and a move below that level could embolden the bears. Earlier in the day, Markit reported an unexpected decline in Japan’s monthly manufacturing PMI. The manufacturing index slid to 51.6 from 53.0 in June.
