EUR Tanks As Eurozone PMIs Plunge Further

German Data Drops AgainEURUSD is trading lower today as EUR comes under heavy selling pressure on the back of a slew of negative data today. The latest round of eurozone PMIs saw factory and non-factory sector readings in France, Germany and Spain all undershoot forecasts. The factory reading in Germany was particularly weak, falling to 38.8 from 40.6 prior, while in France the reading fell to a 32-month low.Eurozone PMIs TankLooking at the eurozone data as a whole, the manufacturing PMI was seen at 42.7 from 43.4 prior, below the 43.5 the market was looking for. Falling deeper into contractionary territory, the weakness in the manufacturing sector is a major red flag for the eurozone and warns of a brewing economic storm in the single market. The services PMI, while slightly better at 51.1, was seen falling from the prior month’s 52 reading and came in below the 51.7 the market was looking for.Recession Risks GrowingThis latest batch of data serves as strong evidence of the growing recessionary risks in the eurozone. With the overall composite PMI for the eurozone falling to 48.9 from 49.9 prior, its biggest contraction in 8 months, the market is quickly repricing its ECB rate projections. While the bank is forecast to hike again this week, traders are now eyeing a less hawkish set of guidance from the bank given the growing economic headwinds, which should keep EUR pressured near-term.Technical ViewsEURUSDThe correction lower in EURUSD has seen the market break back below the 1.1126 level. Price is now testing the bull channel lows which, if broken, open the way for a test of the 1.0785 level support next, in line with falling momentum studies.