GERMAN DATA: PMI: Services surprises to upside, but less services prices not as concerning as France
Similar to France, the composite output index was at a multimonth high of 50.5 (48.8 expected, 47.7 prior, 10-month high for Germany), driven by an increase in demand for services (with the services PMI at 53.3, also a 10-month high). However, manufacturing also saw a small disappointment, rising to 42.2 from 41.9 (42.7 expected) with the " the sharpest drop in factory new orders for five months." However, on the prices side the picture doesn't appear as concerning as in France with services prices merely rising at their series long-run average. Highlights from the press release
- "On the employment front, there was likewise a dichotomy between rising workforce numbers in the service sector and further manufacturing job cuts. The rate of hiring in the service sector even quickened slightly and was the second-fastest seen in the past ten months."
- "Despite manufacturers reporting challenging demand conditions and maintaining a preference for lower workforce numbers, they signalled improved expectations towards future production. Factory sentiment was at a 12-month high in April."
- "Latest data meanwhile showed a slight increase in price pressures at the start of the second quarter."
- "Output prices likewise rose in April at a rate that virtually matched the series long-run average, having ticked up from March’s 37-month low. Higher prices charged were centred on the service sector, where firms reported the pass-through of increased costs to customers. This contrasted with the situation in manufacturing, which saw the steepest rate of decline in factory prices since September 2009 amid strong competition for new work."
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
USDCAD TECHS: Resistance Remains Exposed
- RES 4: 1.3729 76.4% retracement of the Nov 1 - Dec 27 bear leg
- RES 3: 1.3661 High Nov 27
- RES 2: 1.3623 61.8% retracement of the Nov 1 - Dec 27 bear leg
- RES 1: 1.3614 High Mar 19 and bull trigger
- PRICE: 1.3600 @ 15:41 GMT Mar 22
- SUP 1: 1.1.3420 Low Mar 8 and the bear trigger
- SUP 2: 1.3359 Low Jan 31 and key S/T support
- SUP 3: 1.3343 Low Jan 12
- SUP 4: 1.3288 Low Jan 5
USDCAD is trading higher but for now, remains below its recent highs. Key short-term resistance has been defined at 1.3614, the Mar 19 high. A break of this level would confirm a resumption of the uptrend that began on Dec 27. This would expose 1.3623, a Fibonacci retracement, and 1.3661, the Nov 27 high. Key support has been defined at 1.3420, the Mar 8 low. A break would be bearish.
AUDUSD TECHS: Bearish Price Action
- RES 4: 0.6729 High Jan 12
- RES 3: 0.6708 61.8% retracement of the Dec 28 - Feb 13 bear cycle
- RES 2: 0.6668 High Mar 8 and the bull trigger
- RES 1: 0.6570/6635 50-day EMA / High Mar 21
- PRICE: 0.6522 @ 15:40 GMT Mar 22
- SUP 1: 0.6504 Low Mar 19
- SUP 2: 0.6478 Low Mar 5
- SUP 3: 0.6443 Low Feb 13 and the bear trigger
- SUP 4: 0.6412 76.4% Fibonacci retracement for Oct - Dec upleg
AUDUSD has reversed lower in line with a recovery in the USD. The move lower reinstates a bearish threat and attention is on support at 0.6478, the Mar 5 low. A break of this level would expose the key support and bear trigger at 0.6443, the Feb 13 low. Moving average studies continue to highlight a short-term downtrend. Initial resistance is at Thursday’s 0.6635 high.
EURJPY TECHS: Trend Outlook Remains Bullish
- RES 4: 167.45 1.382 proj of the Jan 2 - 19 - Feb 1 price swing
- RES 3: 166.46 1.236 proj of the Jan 2 - 19 - Feb 1 price swing
- RES 2: 166.00 Round number resistance
- RES 1: 165.35/67 High Mar 20 / 2.0% 10-dma envelope
- PRICE: 163.66 @ 15:38 GMT Mar 22
- SUP 1: 162.60 20-day EMA
- SUP 2: 161.39 Trendline drawn from Dec 7 low
- SUP 3: 160.22 Low Mar 11
- SUP 4: 159.47 Low Feb 8
The EURJPY uptrend remains intact following this week’s move higher and the latest pullback is considered corrective. The cross has traded through 164.30, the Nov 16 ‘23 high and the medium-term bull trigger. This confirms a resumption of the long-term uptrend. The break higher opens 165.67, the top of a MA envelope, and the 166.00 handle further out. Initial firm support lies at 162.60, the 20-day EMA.
