Preliminary Eurozone PMIs looked mostly positive, with the Services and Composite components advancing firmly in August (53.3 and 51.2 respectively) while Manufacturing (45.6) fell slightly versus July and was a little below expectation, Scotiabank’s Chief FX Strategist Shaun Osborne notes.   

Corrective losses may not extend much below 1.1050/75

“A second look showed that solid French Services/Composite data did all the heavy lifting (Olympics), however, while German data were all below forecasts and weaker than July.”

“EUR/USD was choppy around the headlines but eased back slightly as markets got to grips with the details. Meanwhile, the ECB’s wage data for Q2 reflected lower negotiated wages gains of 3.6% Y/Y, down from 4.7% in Q1.”

“Spot is consolidating. Price action is turning more neutral (an inside range session is potentially developing today) and oscillator studies are stretched. Intraday price action is putting short-term trend support at 1.1140 under pressure. Corrective losses may not extend much below 1.1050/75 for now, however.”