EUR Bid On Better DataThe Euro is catching a bid this morning following the release of the latest preliminary PMI data sets for February. The eurozone manufacturing PMI was seen dipping slightly to 58.4 from the prior month’s 58.7, in contrast to the 58.9 reading expected. However, despite the weakness in manufacturing, which was largely explained as a result of higher materials costs and supply-side constraints, the services PMI surged higher. At 55.8, the services PMI marked a sharp jump from the prior month’s 51.1 reading and was well above the 52.3 reading forecast.On the back of the recent hawkishness from the ECB, the jump in the services sector (given its dominance in the economy) is a reassuring sign for EUR bulls. While there is still a high level of uncertainty around tensions between Russia and Ukraine, the fundamentals are improving nicely suggesting that, if war is avoided, EUR has room to advance in the near-term.Technical ViewsEURUSDFollowing the breakout above the bear channel, price has since slipped lower, trading back beneath the 1.1377 level. However, the recent price action continues to show signs of basing with price now carving out an inverse head and shoulders pattern suggesting room for a break higher in the near term. 1.1527 is the key level for bulls to break, opening the way for a test of 1.1703 next.
Source: Tickmill
