Forex Fundamental Analysis – Eurozone business activity unexpectedly contracted


EURUSD trading plan:

Euro zone business activity unexpectedly contracted this month due to an accelerating downturn in manufacturing and a near-stalling of service sector growth as burgeoning costs pushed consumers to cut back on expenditure, a survey showed. S&P Global ‚s flash Composite Purchasing Managers‘ Index, seen as a good gauge of overall economic health, fell to 49.4 in July from 52.0 in June. A reading below 50 indicates a contraction and July’s preliminary estimate was the lowest since February 2021. The euro zone economy looks set to contract in the third quarter as business activity slipped into decline in July and forward-looking indicators hint at worse to come in the months ahead. Excluding pandemic lockdown months, July’s contraction is the first signaled by the PMI since June 2013, indicative of the economy contracting at a 0.1% quarterly rate.

Investment idea: sell 1.0234 and take profit 1.0170.

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