As we had expected, preliminary estimates showed a surge in the business activity of various countries. The data turned out to be above the forecast. Let’s find out whether such figures managed to change the market sentiment.
Thus, the eurozone composite PMI soared to 30.5 points from 13.6 points. Analysts had predicted a smaller jump to 27.0 points. However, in France, the indicator’s rise turned out to be below the forecast. As a result, such data caps the euro’s increase.
Nevertheless, the euro/dollar pair managed to form a new trend hovering within the range of 1.0775/1.1000. Thus, the quote is approaching the psychological level. It is quite possible that the pair may fluctuate within the levels of 1.0950/1.1000. If the price consolidates below 1.0950, it may hit the levels of 1.0900,1.0850, and 1.0775. However, the market sentiment may unexpectedly change. In this case, the price could consolidate above 1.1020 on the 4-hour chart. Thus, the limits of the current range will be of minor importance.
In the UK, the composite PMI jumped to 28.9 points from 13.8 points. Analysts had expected a smaller rise to 22.0 points. Amid the data, the British pound is confidently moving up.
A lift in the business activity was triggered by an improvement in the business sentiment amid loosening of lockdown measures. In fact, not only Europe is reopening its economy. The US has also made such a decision. Thus, the US business activity is also expected to advance. Moreover, the PMI figures may significantly beat the forecast. As a result, the US dollar may gain in value.
However, the US dollar rise could be limited by the labor market report. The fact is that the US unemployment is skyrocketing. Moreover, the number of continuous unemployment claims may hit another high of 24.5 million. Investors are already tired of a flow of negative news.
Let’s take a look at the pound sterling dynamic. During 40 hours, the pound/dollar pair was fluctuating within the range of 1.2240/1.2280. Then, the pair started to recover, but dropped to 1.2184. It is quite possible that sellers may become more active. If the price consolidates below 1.2180 it may reach the local support level that was hit on May 18th.
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