Premium Watchlist Recap: Euro Space PMIs (September 2025)

The Euro Space’s flash PMI readings for September delivered a combined bag, with the composite index edging as much as 51.2 from 51.0, marking a 16-month excessive however falling in need of signaling sturdy development momentum.

The divergence between sectors painted an image of an uneven restoration, with providers resilience offset by manufacturing weak spot throughout each Germany and France.

Let’s look at which setups from our watchlist capitalized on this combined PMI consequence and the way they carried out towards a backdrop of surging greenback power following surprisingly sturdy US financial information.

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The Setup

What We Have been Watching: Euro Space PMIs for September 2025

• The Expectation: Markets anticipated modest enchancment with Manufacturing PMI holding above 50.0
• Information consequence: Combined outcomes, with Providers beating (51.4 vs 50.9 anticipated) however Manufacturing disappointing (49.5 vs 50.8 anticipated)
• Market surroundings surrounding the occasion: Preliminary risk-on sentiment reversed mid-week as robust U.S. information strengthened greenback power and Fed-ECB coverage divergence narratives

Occasion End result

The September flash PMI information revealed regarding divergences throughout the Euro Space financial system.

Whereas providers exercise shocked to the upside at 51.4 versus 50.9 anticipated, manufacturing disenchanted considerably, dropping to 49.5 from 50.7 and lacking the 50.8 forecast, slipping again into contraction territory for the primary time in three months.

Key Takeaways:

• Composite PMI printed at 51.2, up from 51.0 however signaling solely modest growth
• Manufacturing PMI fell to 49.5 from 50.7, badly lacking the 50.8 forecast and returning to contraction
• Providers PMI shocked greater at 51.4 versus 50.9 anticipated and 50.5 earlier
• Germany Manufacturing slumped to 48.5, lacking the 50.0 forecast considerably
• France Manufacturing dropped to 48.1 from 50.4, beneath the 50.1 anticipated
• Germany Providers jumped to 52.5, stunning versus 49.9 expectations
• New orders stalled fully after August’s transient uptick, with manufacturing orders falling sharply
• Employment remained unchanged as enterprise confidence dipped to a four-month low
• On internet, there appears to be extra adverse than constructive within the newest Eurozone PMIs

Elementary Bias Triggered: Bearish EUR setups

Broad Market and Exogenous Drivers:

Monday-Tuesday: Euro Climb and Wobble

The week started with ECB officers Stournaras and Kazaks declaring the rate-cutting cycle over, offering preliminary euro assist. Nonetheless, Tuesday’s combined PMI launch instantly challenged this narrative, with manufacturing weak spot offsetting providers power. Fed Chair Powell’s labor market considerations briefly weakened the greenback, however good points proved fleeting.

Mid-Week: Threat Turnaround

Wednesday noticed German enterprise sentiment (IfO) disappoint at 87.7 versus 89.2 anticipated, compounding considerations about Europe’s largest financial system. Threat sentiment turned adverse throughout London hours. The greenback caught a critical bid throughout Asian buying and selling that sustained by way of each London and New York periods, with Fed officers pushing again towards aggressive easing expectations.

Thursday-Friday: Greenback Domination

Thursday delivered the knockout blow for EUR/USD as U.S. GDP was revised sharply greater to three.8% from 3.3% whereas jobless claims plummeted to 218k versus 240k anticipated. This information mixture crushed hopes for aggressive Fed cuts, sending the greenback hovering. Friday’s Core PCE got here in-line at 2.7% year-over-year, whereas Trump’s in a single day risk of 100% pharmaceutical tariffs added one other layer of uncertainty for European exporters.

EUR/USD: Bearish EUR Occasion End result + Threat-Off State of affairs

= Arguably good odds of a internet constructive consequence

EUR/USD 1-hour Foreign exchange Chart by TradingView

EUR/USD proved essentially the most professional setup from our watchlist, delivering a textbook bearish response to the disappointing manufacturing information. The pair was testing resistance close to the Pivot Level and 1.1800 main psychological degree forward of the PMI releases, offering an excellent entry level for shorts.

The preliminary response noticed the pair dip briefly because the manufacturing miss registered with merchants, however the actual transfer got here Wednesday (merchants repricing much less dovish Fed rhetoric) & Thursday when the mixture of a powerful U.S. GDP revision and spectacular jobless claims information created an ideal storm for greenback bulls.

EUR/USD slipped by way of the channel backside, the 1.1750 minor psychological degree and ultimately the 1.1700 deal with, ultimately making its option to S1 (1.1667) earlier than stabilizing. The pair bounced off of this space however struggled to mount any significant restoration, as the basic narrative had clearly shifted in favor of continued greenback power in the course of the latter half of the week.

The setup delivered roughly 50-70 pips from the preliminary entry zone round 1.1800, with those that held by way of Thursday’s U.S. information doubtless capturing roughly 120-140 pips till S1.

Not Eligible to maneuver past Watchlist – Bullish EUR Setups and Bearish EUR/AUD Setup

EUR/AUD: Bearish EUR Occasion End result + Threat-On Atmosphere

EUR/AUD 1-hour Foreign exchange Chart by TradingView

EUR/AUD confronted a difficult surroundings, because the pair was on a tear early within the week and busted by way of the preliminary resistance zone mentioned in our watchlist. Australia’s personal combined information move added a layer of complexity to the shifting danger narrative, earlier than AUD ultimately picked up on some assist after Australia’s CPI launch.

The pair rallied nearer to R1 (1.7908) main as much as the Euro Space PMI releases, which then triggered an preliminary selloff adopted by a fast restoration again to the resistance. One other spherical of promoting stress kicked in round Australia’s inflation print, taking the pair again all the way down to assist across the 1.7800 main psychological mark.

Nonetheless, the pair remained stubbornly bid above the damaged resistance zone for the rest of the week, invalidating our bearish setup situations. The 61.8% Fibonacci retracement degree offered stable assist, and any makes an attempt to push decrease have been shortly purchased.

This setup served as a reminder that even with favorable occasion outcomes, the broader danger surroundings can fully negate directional biases.

EUR/CHF: Bullish EUR Occasion End result + Threat-On Atmosphere

EUR/CHF 1-hour Foreign exchange Chart by TradingView

EUR/CHF entered the PMI launch buying and selling inside our recognized 0.9340-0.9355 resistance zone, establishing properly for a possible bullish breakout ought to the info shock to the upside.

Nonetheless, the manufacturing disappointment invalidated this setup from transferring past our watchlist, and initially pushed the pair decrease towards the Pivot Level at 0.9336, even because the broader market surroundings wasn’t constantly risk-off sufficient to drive vital franc shopping for.

Midweek risk-off flows stored the pair beneath the ceiling, sending it additional south because the day went on earlier than the strikes have been shortly reversed as danger sentiment stabilized. The pair chopped round inside a 30-pip vary all through the week, respecting each the resistance zone above 0.9350 and discovering assist close to 0.9330.

EUR/CAD: Bullish EUR Occasion End result + Threat-Off State of affairs

EUR/CAD 1-hour Foreign exchange Chart by TradingView

EUR/CAD was consolidating barely above the R1 Pivot resistance at 1.6302 when the PMI information was launched and invalidated this setup from transferring past the Watchlist stage.  We noticed an preliminary bearish response, which discovered assist at this inflection level, then surprisingly rallied as much as the 1.6350 minor psychological degree because the Loonie appeared to path USD weak spot early within the week.

Nonetheless, mid-week geopolitical tensions and transient oil value spikes introduced a bit extra assist for the commodity-related foreign money, which additionally took cues from the bullish greenback turnaround, resulting in a breakdown beneath R1 on Thursday. Value in a while discovered assist on the 1.6250 minor psychological deal with, then retraced its drop again to the damaged assist.

The Verdict

The EUR/USD setup was not solely essentially the most logical to maneuver past Watchlist stage, however arguably additionally delivered the most effective danger/reward amongst our watchlist, benefiting from each the disappointing Euro Space manufacturing information and the following surge in greenback power from distinctive US financial information later within the week.

EUR/AUD was arguably certified to maneuver past Watchlist given the combined broad market surroundings, and it offered modest alternatives for nimble merchants however lacked the follow-through as danger sentiment shifted away from higher-yielding currencies later within the week whereas bullish EUR/CAD and EUR/CHF setups have been invalidated by the area’s manufacturing business miss.

General, we price the EUR/USD setup as “extremely doubtless” possible in supporting a internet constructive consequence because the pair stayed beneath the resistance ranges mentioned for a bearish state of affairs and delivered additional draw back momentum because the narrative favored additional upside for the greenback because the week progressed.

Key Takeaways:

Dominant Foreign money Themes Override Regional Information

Whereas the Euro Space PMI disappointment offered preliminary path, the week’s value motion was in the end dominated by U.S. greenback power  following shifting Fed sentiment on price cuts & Thursday’s spectacular GDP and jobless claims information.

This strengthened that when one foreign money has a number of converging bullish catalysts, it tends to overwhelm single-event outcomes in different currencies.

Software: Take into account the broader elementary calendar and determine which foreign money has essentially the most catalysts aligning in its favor, somewhat than focusing solely on particular person occasion outcomes.

Combined Information Requires Selective Pair Selection

The divergence between providers power and manufacturing weak spot within the PMI information created ambiguous indicators. EUR/USD labored as a result of the greenback had its personal bullish drivers, whereas crosses like EUR/CHF struggled with no clear risk-off catalyst.

Software: When dealing with combined financial information, prioritize setups the place the counter-currency has clear elementary drivers, somewhat than relying solely on the occasion foreign money’s path.

Technical Ranges Matter Extra in Low-Conviction Environments

With the PMI information sending combined indicators and danger sentiment fluctuating, key technical ranges just like the 1.1800 and 1.1750 ranges on EUR/USD and pivot factors throughout all pairs performed essential roles in defining entry and exit factors.

Software: In environments with conflicting elementary indicators, lean extra closely on technical evaluation for commerce administration whereas maintaining place sizes conservative.