Forex Trading Library

Eyes on Services PMI’s Ahead

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After a series of economic releases across the board for the manufacturing sector yesterday, from the Euro Zone, UK and the US, another day comes with further economic releases which set to have a notable impact on the markets. Today, all eyes will be headed toward the Services sector in the Euro Zone, as we will be waiting for the Services PMI’s from many of the EU countries. Yet, volatility is likely to advance further as banks, financial institutions and hedge funds are likely to continue with their positioning for the new year. In Today’s article, we will discuss the Services PMI’s, what does it mean and how to trade the news.


Services PMI: Level of a diffusion index based on surveyed purchasing managers in the services industry. Released monthly, on the third business day after the month ends. Above 50.0 indicates industry expansion, below indicates contraction.

Why This Is Important?

It’s positively correlated with interest rates – early in the economic cycle an increasing supply of money leads to additional spending and investment, and later in the cycle expanding money supply leads to inflation

Moreover, it survey of about 300 purchasing managers which asks respondents to rate the relative level of business conditions including employment, production, new orders, prices, supplier deliveries, and inventories.





Spanish Services PMI



Italian Services PMI



French Services PMI



German Services PMI



Euro Zone Services PMI



UK Construction PMI



There are two versions of today’s data, the initial reading of the services PMI from Spain and Italy, while the Final Services PMI will be released for France, Germany and the Euro Zone. Despite the fact that such data doesn’t have a notable impact on the markets, but it’s worth to follow as the ECB is expected to start tapering its QE programme in the coming months.


Yesterday’s economic releases can be seen as an encouraging sign for Europe, whether from the Manufacturing PMI’s data or the inflation figures from Germany, which showed a huge increase in December. Yesterday’s data keeps the ECB on course to start tapering its QE programme in April of this year. This is one of the reasons of the Euro stabilization above 1.0350’s for the time being.

However, the US data showed a notable improvement over the past few weeks. Yesterday, the Manufacturing PMI showed a notable improvement, whether in new orders, employment, exports and the price paid, which also keeps the estimates for further rate hikes by the Federal Reserve.

Therefore, traders might need to be very careful in dealing with the upcoming data, the US Dollar trend is strongly bullish and likely to remain intact for the next couple of months unless the economy turns around due to the policies of the new administration in the US. On the other hand, the Euro general outlook remains bearish, especially after declining below the solid support of 1.0450’s, which increase the chances for another leg lower towards the parity with the US dollar in the coming weeks.

Levels To Watch For Major Currencies

Symbol S3 S2 S1 Pivot R1 R2 R3
EURUSD 1.0179 1.0259 1.0332 1.0412 1.0485 1.0565 1.0638
USDJPY 115.67 116.43 117.09 117.85 118.51 119.27 119.93
GBPUSD 1.2078 1.2138 1.2188 1.2248 1.2298 1.2358 1.2408
USDCHF 1.0069 1.0136 1.0205 1.0272 1.0341 1.0408 1.0477
USDCAD 1.3330 1.3363 1.3397 1.3430 1.3464 1.3497 1.3531
AUDUSD 0.7118 0.7146 0.7186 0.7214 0.7254 0.7282 0.7322
NZDUSD 0.6781 0.6832 0.6874 0.6925 0.6967 0.7018



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