The figure was below the expectations for a print of 61.5, which may well spur the European Central Bank to ease policy in the near future. When the powerhouse of the eurozone economy falters, it generally means it’s time to act.
The euro took a tumble against the dollar in the immediate aftermath of the data release, but has since recovered to push a little higher, and is not testing the top end of the recent range. Breaking through the 1.3740 highs of 24 January could put the single currency on a trajectory to target the key resistance of 1.3833.
Trendline resistance from the all-time 1.6040 highs stands in the way; however, breaking the 1.3810 level convincingly has been a tall order this year and below this there is still a bias for downside. A break through 1.3740 would put the pair on a measured move towards this particular metric.
The 50-hour moving average is supporting the moves to the upside for now. On the downside, 1.3680 – the bottom of the current range – is the next support.
US data will be released later this afternoon; it should provide trading opportunities and a catalyst for direction. The Empire State Manufacturing Index will be released at 1.30pm London time. It is expected to see a pullback to 9.9 from last month’s rather toppy 12.5. The decline in ISM manufacturing last month helps support this possibility.