The falling of EU Manufacturing PMI of August below 50 in the contracting territory to 49 while the markets were waiting for 49.5 from 50.4 in July raised the markets worries about the growth outlook in the Euro zone showing its needs for stimulation while it's required currently from most of the Euro zone countries to implement governmental austerities plans cutting its spending and raising its taxes for improving their financial situation amid continued investors' concerns about the debt crisis in the Euro zone.

These weak manufacturing data have come in line with the falling of Aug Germane IFO last week to 108.7 while the markets were waiting for from decreasing to 111.3 from 112.9 in June following the big drop of Aug EU ZEW to -40 while the consensus was referring to improving to -7.6 from -7 in July and also this week earlier release of EU consuming confidence index falling to -17 in August while it has been forecasted to -12 from -11.6 in July showing increased downside risks facing the European economic growth.

The Single currency has fallen versus the greenback below 1.4327 supporting after inability to get over 1.4383 again and it is now finding support at 1.4262 and in the case of breaking it, this cane open the way by God's will for further falling to another supporting levels at 1.4211, 1.4149, 1.4102 then 1.4054 again before the psychological level at 1.40 while moving up can meet resistances at again at 1.4383, 1.4464, 1.4548 which was the high of this week and the breaking of it can be followed by facing 1.4576 whereas the pair has formed its lower high below 1.4695 which came below 1.4939 which was the formed top in December 2009.

While the markets are waiting now to know more about the manufacturing sector in US waiting for the release of Aug Manufacturing ISM index which is expected to get down below 50 too at 48.5 from 50.9 in July before the focusing turning back again to the US labor markets ahead of the waited release of US labor report of August tomorrow by God's will, which is expected to show new 90k added jobs to the non-farm payrolls from 117k in July with standing of the unemployment rate at 9.1% as it was in July.

Kind Regards

FX Market Strategist
Walid Salah El Din