The Organization for Economic Cooperation and Development released a rather pessimistic economic research due to Markit PMI announcement which indicates some troubles in Europe. According to the latest released figures, Markit's final manufacturing Purchasing Managers' Index for May fell to a reading of 51.5 points, being unchanged from an earlier flash estimate as well as showing the second-weakest reading since February. It is worth to point out that reading came out in line with expectations, while in the previous month; the reading came in at 51.7 exceeding expectations of 51.5. Overall, May PMI announcement signalled a further growth slowdown in the Euro zone manufacturing sector, due to inflows of new business from both domestic and export markets which continue to increase at lacklustre rates. Six out of the eight nations included in the single currency region manufacturing survey reported expansions during May. In the first position of the PMI growth rankings is Netherlands while the third place is occupied by Germany. Also, these countries were the only ones to report faster rates of growth. Manufacturing production, in turn, in the Euro area advanced for the 35th consecutive month while the rate of rise in new business slowed down to a 15-month low.
Industry data showed that manufacturing activity in the United Kingdom narrowly expanded in May, slightly beating analysts' expectations for it to remain in contraction for a second month. In a report, market research group Markit stated that UK manufacturing PMI increased to a seasonally adjusted 50.1 last month from a reading of 49.4 in April, which had been the first contraction in three years and was revised up from an initial figure of 49.2, while analysts forecasted the index to advance to 49.6 in May. Nevertheless, the general data still suggests there is an overall lack of confidence with manufacturing still under pressure and the sector will again be a net drag on the economy for the second quarter. Production volumes were broadly unchanged in the latest survey month, as the growth rate of new order inflows remained subdued, albeit slightly quicker than in April. Moreover, there was a negative impact from uncertainty with many companies suggesting that the EU referendum was having a detrimental impact on business. There was notable weakness in the investment-goods sector and strong job cuts in this sector. Overall employment also declined for the fifth successive month, although the pace of decline did slow. The index overall suggests that manufacturing will contract more than 0.5% for the second quarter and will undermine overall GDP data with the economy remaining dependent on the services sector.
Upcoming fundamentals: European Central Bank gathers in Vienna
EUR/USD continued to rally on Wednesday
Daily chart: The daily chart shows that the Euro has broken the first weekly resistance at 1.1199 against the Greenback. The currency exchange rate is steadily moving to the middle Bollinger band at 1.1230 and further there lies a cluster of resistances. From 1.1282 to 1.1331, in total four possible rebound points for the currency pair are resting at the moment, such as the 55-day SMA, monthly PP, and weekly R2 and R3.SWFX sentiment moves to the bearish side
Spreads (avg,pip) / Trading volume / Volatility
Average forecast says EUR/USD will trade at 1.12 by August
Meanwhile, traders, who were asked regarding their longer-term views on EUR/USD between May 2 and June 2 expect, on average, see the currency pair around 1.12 by the end of August. Though 55% (-2%) of participants believe the exchange rate will be generally below 1.12 in ninety days, with 32% (-1%) alone seeing it below 1.08. Alongside, only 24% (+5%) of those surveyed reckon the price will trade in the range between 1.12 and 1.18 on August 31.