EUR/USD Price Plunge to 1.0896 as Manufacturing PMI Slips in Eurozone; What’s Next?

In today’s analysis, the EUR/USD currency pair demonstrates modest gains, trading at $1.0896, a -0.25% increase. This movement comes against the backdrop of mixed economic indicators in Europe.

French Flash Manufacturing PMI stands at 45.8, below the anticipated 47.5, suggesting contraction in the sector. Similarly, the services sector indicates a slowdown with a PMI of 47.8, against a forecast of 48.8.

Germany, Europe’s largest economy, also presents a concerning picture with its Manufacturing PMI at 41.6, significantly lower than the expected 43.1, and its Services PMI barely in expansion at 49.8, against a forecast of 48.8.

These figures underscore challenges in the Eurozone’s manufacturing and services sectors, potentially pressuring the EUR.

However, the currency’s slight uptick suggests that investors may be weighing other factors, such as upcoming economic events in the UK and the US. The UK’s Manufacturing and Services PMIs are set to release at 9:30, with expectations of a contraction in manufacturing but a stable services sector.

Later in the day, the US will report its Flash Manufacturing and Services PMIs, anticipated to show slight improvements, and Existing Home Sales, expected at 4.00M from the previous 3.95M.

These forthcoming data releases could introduce volatility to the EUR/USD pair. The US economic indicators, in particular, could bolster the USD if they surpass expectations, potentially reversing the current uptrend in EUR/USD.

Investors should closely monitor these events as they could significantly influence market sentiment and currency valuations. The mixed PMI data from the Eurozone suggests underlying economic fragility, while upcoming US data could provide insights into the economy’s direction, affecting the EUR/USD trading dynamics in the short term.

EUR/USD Price Forecast

The currency pair stands above its pivot point of $1.0906, indicating a bullish sentiment in the short term. Key resistance levels to watch are at $1.0954, $1.0981, and $1.1011, with support found at $1.0874, $1.0836, and $1.0800.

The Relative Strength Index (RSI) is at 66, suggesting that the euro is approaching overbought territory but still has room for upward movement. The 50-day Exponential Moving Average (EMA) at $1.08896 further confirms the bullish trend, standing below the current price.

Investors should note that staying above the pivot point signals strength, but a dip below $1.0906 could trigger a sell-off. The overall outlook remains bullish, yet cautious trading is advised as the currency navigates through key technical levels.