Global macro overview for 23/04/2018

The PMI indicator has traditionally been recognized as an important measure of the economic condition of a given country. It gives (in points) something that can be described as the mood of managers. The managers of large enterprises answer questions about planned production, employment or orders. It is assumed that these plans reflect their view of the economy: the more it is worth developing a business and risking the better the whole country. Of course, it is a self-fulfilling prophecy to some extent, but there are no perfect indicators. Either way, when the PMI has more than 50 points, the result is considered good, testifying to the advantage of optimists. The PMI data below the 50 level means deterioration in economic expansion.

Better readings in the PMI indexes from France and Germany have built up an appetite for positive surprises in the indicators for the entire Eurozone. Although the business service activity index increased to 55 from 54.9 (versus 54.6 expected), the industry PMI dropped to 56 from 56.6 (versus 56.1 expected). This is the lowest reading in 14 months. In the statement, there is a note, that says the strong EUR weakens export demand and, according to the assessment of companies, economic growth may slow down in the coming months.

Let's now take a look at the EUR/USD technical picture at the H4 time frame. The PMI data does not help the EUR/USD and the market slides below the technical support at the level of 1.2238 and makes a new marginal low at 1.2222 as it approaches the technical support at the level of 1.2215. The key technical support is still seen at the level of 1.2154 and the bias remains neutral (horizontal consolidation continuation).

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