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On Friday, the data on the production sector of the eurozone disappointed traders, although they were preliminary.
According to the report, the preliminary purchasing managers' index (PMI) for the manufacturing sector in France in June was 52.0, although it was predicted at the level of 50.7 points against 50.6 points in May this year.
The French service sector has also grown. The preliminary purchasing managers' index (PMI) for the service sector in June was 53.1 points, while it was projected at 51.5 points against the May value of 51.5 points.
In Germany, things in the manufacturing sector have become slightly better, but the index is still below 50 points, indicating a decline in growth. According to the Markit report, the preliminary purchasing managers' index (PMI) for the German manufacturing sector rose to 45.4 points in June against 44.3 points in May. The index was forecasted at the level of 44.5 points.
But the scope of services remains in good order. There, a preliminary index of purchasing managers for the service sector rose to 55.6 points in June against 55.4 points in May and a forecast of 55.4 points.
In total, according to IHS Markit, in June, PMI for the manufacturing sector of the eurozone rose to 47.8 points from 47.7 points in May. The index remains below 50, indicating a decline in activity.
It should be noted that for three months of the second quarter of this year, the index showed the largest decline.
As for the data on the US, they did not help the US dollar much, because, despite the good statistics on the housing market, the statements of the Fed representatives scared off buyers again.
According to the report of the National Association of Realtors, sales in the secondary housing market in the US in May 2019 increased by 2.5% and amounted to 5.34 million homes per year. Economists had expected growth of 1.2%, to 5.25 million homes. Compared to the same period of the previous year, sales in May fell by 1.1%.
The association noted that a good start of the spring sales season was better than expected, and the preservation of good employment growth will continue to ensure the sale of houses in the second half of the year.
As mentioned above, the slowdown in the manufacturing sector has affected not only Europe. A similar indicator for the activity of private companies in the manufacturing sector in the United States decreased.
According to IHS Markit, the preliminary composite index, which includes activity in the manufacturing and services sectors, fell to 50.6 points in June from 50.9 points in May.
As for the PMI indicator for the manufacturing sector, it fell to a critical level of 50.1 points in June, while it was 50.5 points in May.
Statements by Fed representatives once again pushed traders to close long positions in the US dollar. The President of the Federal Reserve Bank of St. Louis James Bullard on Friday said that the reduction in interest rates of the US Federal Reserve would currently support the country's economy in the face of growing risks. His colleague Neel Kashkari also sees the need for decisive measures to bring inflation back to the target level of 2%, which requires lowering interest rates.
As for the technical picture of the EURUSD pair, further growth is unlikely to continue without the necessary downward correction. The test level of 1.1400 was a key target for speculative players. Now, it is best to return to long positions on the correction from the support of 1.1340 or on the rebound from a larger support range – 1.1310. The task of buyers of risky assets for this week will be a breakthrough above the resistance of 1.1400, which will lead the trading instrument to the area of highs: 1.1460 and 1.1540.
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