FxWirePro: Daily Commodity Tracker - 21st March, 2022 
German flash PMI reports are going to be one of the key factors which would drive gains or loss for the day. The data will be released at 7:30 GMT, while the euro is treading water around 1.13 area.
- We had excitedly reported a breakout in EUR/USD last week as bulls cleared a key channel resistance. The break was significant as the EUR/USD recovered from its 2018 low and cleared a down trending channel resistance that has been in place since the beginning of the year. See chart for greater clarity.
- On Friday, as the break out happened, the EUR/USD retail sentiment flipped to net short on EUR/USD, giving the pair a bullish bias.
- However, this week’s price action has made it clear that the momentum is not with the breakout bulls and retail sentiment report also showed that Friday’s flip was only temporary.
- As the breakout turning out to be a false one, we could witness sharp sell-off in EUR/USD.
German flash PMI reports could be defined, as it was shocker last month when manufacturing PMI declined to just 44.1 in March, the worst showing for the German manufacturing sector since the Eurozone crisis of 2011/12.
Today, manufacturing PMI is expected to slightly edge higher to 45 for the month of April, which still points to a contraction in the sector. However, if it declines further below the March reading, we can expect sharp selloff in the single currency, as Germany and its manufacturing sector have long been one of the key growth engines of the entire continent.
