Euro Launches From 1.38 On Better-Than-Expected PMI Figures

Talking Points:

• Eurozone Markit PMI Data Better-than-Expected
• Euro Holds 1.3800 Support, 1.3882 Next Level of Resistance
• Further Euro Losses May Be Ahead if ECB Dragi Continues to Talk Down

Eurozone PMI data came in better-than-expected as service-sector activity reached a 34-month high, and factory-sector activity rose to a 3-month high. Earlier in the European session, German and French PMI also topped analyst expectations. The improvement in PMI figures brings some relief as recent news-flow from the single currency has increasingingly underperformed relative to expectations; according to a Citigroup gauge measuring the gap between economists’ estimates and realized outcomes.

The Euro popped higher as the news crossed the wires, potentially reflecting easing bets on ECB stimulus. The ECB pleads for a weaker Euro, but appears adamant on holding back to quantitative easing. Regardless of the short-term bounce technical strategist Jamie Saettele is looking for a top in the Euro, and says that a break below 1.3750 will give way to a sharp decline.

EURUSD 5-Minute Chart, April 23, 2014. Charted created using FXCM Marketscope 2.0.

-- Written by David Maycotte, DailyFX Research Team. Questions, comments or concerns can be sent to [email protected].

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