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EUR/USD: Coronavirus vs Manufacturing PMI's
Fiona Cincotta February 3, 2020 10:50 AM
- EZ manufacturing PMI 47.9 vs 47.8 exp.
- German manufacturing 45.3 vs 45.2 exp.
Coronavirus impact remains unclear
However, investors are unable to get too excited here as Germany is expected to see its exports weaken once again, but this time owing to coronavirus. The outbreak in China, Germany’s largest trading partner has disrupted business there with a significant economic impact expected, which is bound to negatively affect German exports.
The dollar started the week higher boosted by safe haven flows amid ongoing concerns surrounding coronavirus. The number of official cases has risen to 17,000 with 360 deaths, including one outside of China.
US data has underwhelmed recently with downbeat consumer spending and inflation. Today traders will look towards US ISM manufacturing figures, which are expected to show a recovery in the sector from its 477.2 level in December.
Levels to watch:
EUR/USD has fallen below 200 & 100 sma on 4-hour chart, although remains above 50 sma.
The 50 sma offers near term support at $1.1040, a breakthrough here could open the doors to $1.0992, the low for 2020 year to date.
On the flip side, resistance can be seen at $1.11 (round number, high 31st Jan), prior to $1.1120 (high 21st Jan) and $1.1174 (high 16th Jan).
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