Weak data on activity in the manufacturing sector, especially in Germany, put pressure on the euro in the morning. However, given the fact that most traders did not expect significant changes in this sector due to the aggravation of trade wars, the pressure on the euro did not last long. After that, new buyers returned to the market, who continued to buy risky assets, betting on their further strengthening due to the weakness of the US dollar and the sharp growth of the gold market.
According to Markit, the purchasing managers' index (PMI) for the manufacturing sector in Italy in May of this year rose slightly and amounted to 49.7 points, while in April the index was at the level of 49.1 points. Economists had expected the buyer to drop to 48.5 points.
In Germany, the picture became even worse against the background of problems with a sharp drop in exports. According to the report, the purchasing managers' index (PMI) for the German manufacturing sector fell to 44.3 points in May, when it was 44.4 points in April. The data completely coincided with the forecasts of economists. Along with the weak and declining growth rates of the German economy, the situation will only worsen in the 2nd quarter of this year.
The only country where the purchasing managers' index (PMI) for the manufacturing sector showed growth was France. According to the Markit report in May, the index rose to 50.6 points, while in April it was on the border of 50 points. The data completely coincided with the forecasts of economists.
As a result, as mentioned above, the report on the total figure for the eurozone did not surprise traders. According to the data, the purchasing managers' index (PMI) for the manufacturing sector of the eurozone in May 2019 fell even more and amounted to 47.7 points. Let me remind you that finding the index below 50 points indicates a decrease in activity. In April of this year, the eurozone manufacturing PMI was 47.9 points.
As for the technical picture of the EURUSD pair, the market returned to the side of buyers. Now, to maintain bullish growth of risky assets, a breakthrough and consolidation above the resistance of 1.1190 are required, which will lead the trading instrument to new highs in the area of 1.1240 and 1.1295.
Today, the growth of the British pound was limited by a weak report on activity in the UK manufacturing sector, which in May this year slowed sharply. The whole problem is the uncertainty of the timing and order of the UK's exit from the European Union.
According to IHS Markit, the indicator of activity in the UK manufacturing sector in May this year fell to 49.4 points from 53.1 points in April, which is a very bad sign for the economy. Economists had forecast a much less dramatic decline. Many experts note that the decline in activity will continue, as foreign customers are less willing to place new orders.
