The preliminary PMI data for the Eurozone delivered a negative surprise. Instead of expected growth, all indicators declined. The Services PMI fell from 51.6 to 49.2 (forecast: 52.0), and the Manufacturing PMI, expected to rise from 46.0 to 46.2, dropped to 45.2. Consequently, the Composite PMI decreased from 50.0 to 48.1 (forecast: 50.3). The most concerning part is that all indices now signal the onset of a recession. Unsurprisingly, after this data release, the euro continued to decline.

Later, when similar data was published in the United States, the market rebounded to pre-Eurozone data levels, which was unexpected given the stronger U.S. results. The Manufacturing PMI slightly disappointed, rising from 48.5 to 48.8 (forecast: 49.2). However, this was more than offset by the Services PMI, which surged from 55.0 to 57.0 (forecast: 55.1). As a result, the Composite PMI rose from 54.1 to 55.3 (forecast: 54.3).

Given these results, the rebound and return to earlier levels seem illogical. The dollar should have continued to strengthen. This apparent contradiction likely stems from the dollar's already significant overbought condition. Considering the dollar's overbought status and the absence of significant macroeconomic events on the calendar, it is plausible that the euro will exhibit some recovery today.