Global macro overview for 22/02/2017:
The Flash Manufacturing PMI index data had surprised the market participants by printing worse than expected numbers. The market participants expected the PMI to decrease slightly from 55.0 points to 54.7 points, but the slide was down to the level of 54.3 points. Even worse data were released for Flash Services PMI. After 55.6 points a month ago the market participants expected another increase to 55.8 points, but the number released was at the level of 53.9. This is why the Flash PMI Composite in the US declined to a two-month low at 54.3 from 55.8 in January. Although there was still a notably firm tone, growth in manufacturing orders slowed during February with strength in domestic orders offset by weakness in exports. In conclusion, data overall still suggested firm growth in the economy as all of the figures are above 50 level, but the significant slowdown from January will create some concern.
Let's now take a look at the EUR/JPY technical picture at the H1 time frame. After breaking out below the golden trendline and then below the technical support at the level of 119.32, the market might be heading to the next important technical support at the level of 118.62. Nevertheless, the oversold market conditions indicate a possible bounce towards the level of 119.32 before sell-off will continue.
