EUR/USD: Analyzing the Current Market Trends
- European Growth Data Shows Modest Improvements
- S&P Global to Publish US Flash PMIs
- EUR/USD Corrective Advance Expected
During European trading hours on Thursday, the EUR/USD pair saw some demand, aided by a decrease in US Dollar strength. However, the market sentiment remained gloomy due to concerns about China’s economy and uncertainty surrounding the US presidential race. While the Euro made some gains, the economic data still indicates a setback.
European Economic Data
In Germany, the Hamburg Commercial Bank (HCOB) Flash Composite Purchasing Manager Index (PMI) Output Index showed a slight improvement in October. Manufacturing output and services also saw improvements, but the overall report indicates worsening conditions in Germany’s private sector.
For the Eurozone, the Composite PMI edged slightly higher, but manufacturing output remained in contraction territory. The Services PMI was below expectations, and employment sub-index continued to deteriorate.
Additionally, ECB officials participated in the IMF meetings, adding to the market dynamics.
In the US, Initial Jobless Claims were better than expected, but the Chicago Fed National Activity Index was worse than the previous month. S&P Global will release the preliminary estimates of the October PMIs and New Home Sales after Wall Street’s opening.
Technical Outlook for EUR/USD
On the daily chart, the EUR/USD pair remains in positive territory but failed to hold above the 1.0800 level. Moving averages indicate bearish control, with the 20 SMA about to cross below the 100 SMA. Technical indicators suggest an upward correction but not a strong bullish trend.
Looking at the 4-hour chart, the risk is tilted towards the downside. Resistance is seen around the intraday high, and the 100 and 200 SMAs are trending lower. Technical indicators are showing signs of a potential downturn. A break below 1.0750 could confirm further losses.
Support Levels: 1.0750, 1.0710, 1.0660
Resistance Levels: 1.0800, 1.0840, 1.0885
Analysis:
The EUR/USD pair is currently influenced by a mix of economic data from Europe and the US, as well as market sentiment surrounding global economic conditions. While the Eurozone shows modest improvements, the overall picture remains uncertain. In the US, positive jobless claims data is offset by a weaker national activity index, creating a complex market environment.
From a technical standpoint, the EUR/USD pair is facing resistance and potential downside risks. The moving averages and technical indicators suggest a bearish bias, with a break below 1.0750 signaling further losses. Traders and investors should closely monitor key support and resistance levels to navigate the current market conditions and make informed decisions.