The single currency woke up on Friday with shocking Markit manufacturing PMI readings. The eurozone index dropped to 6-year lows at 47.6 against a consensus of 49.5. The contraction is a confirmation that the block’s economy is facing stronger headwinds. Though Germany’s manufacturing activity remains resilient, the impact from global slowdown is likely to leave some mark, at least on nervous investors’ minds.
On the technical side, EURUSD is dropping towards the 61.8% (1.1280) Fibonacci retracement level. The pair is likely to spend the day struggling to find bids. A break below could send the price towards 1.1240.
The sentiment-price correlation chart shows the sentiment below the neutral line. With the price dipping into lower lows, we could expect a steep drop in sentiment.
