EUR/USD has bounced back after hitting near 1.1130 in Thursday’s European session, thanks to the unexpected rise in the flash Eurozone HCOB Composite PMI for August to 51.2, surpassing economists’ expectations.
The strong expansion was driven by robust growth in the service sector’s activity, with the Service PMI expanding to 53.3. However, the Manufacturing PMI declined to 45.6, below the expected 45.8.
Chief Economist Dr. Cyrus de la Rubia highlighted the surge in France’s services activity but expressed doubts about its sustainability. The overall growth in the Eurozone’s services sector has slowed down, while the German economy signaled a slowdown as well.
Daily Digest Market Movers: EUR/USD Remains Firm Amid Fragile US Dollar
- EUR/USD is trading almost flat as the US Dollar remains close to a fresh low. Speculation for Fed interest rate cuts has strengthened, with the Federal Reserve likely to cut rates in September.
- This would mark the first dovish interest rate decision by the Fed in over four years, as inflationary pressures continue to ease.
- Investors are eagerly awaiting Fed Chair Jerome Powell’s speech at the Jackson Hole Symposium for clues on the interest rate path.
- The US flash S&P Global PMI data for August is also in focus, expected to show a decline in the Composite PMI.
Technical Analysis: EUR/USD Posts Fresh Year-to-Date High at 1.1175
EUR/USD is trading within Wednesday’s range, eyeing a continuation of its uptrend towards the year-to-date high of 1.1175. The currency pair has broken out of a channel formation, with all EMAs sloping higher.
The RSI indicates a strong upside momentum, but a corrective pullback is possible due to overbought conditions. Euro bulls are targeting the 1.1200 resistance level, with 1.1100 acting as a key support zone.
Euro FAQs
Understanding the Euro and its impact on the financial markets is crucial for investors. The Euro is the currency for the 20 European Union countries in the Eurozone, accounting for a significant share of global foreign exchange transactions.
The European Central Bank plays a vital role in setting interest rates and managing monetary policy, influencing the Euro’s value. Economic indicators and data releases, such as inflation rates and GDP, also impact the Euro’s direction.