EUR/USD Forecast: backed by dollar's weakness, manufacturing growth
|The EUR/USD pair trades above 1.1180 for the first time in four days, backed at the beginning of the day by renewed dollar's weakness across the board amid yield's weakness, now advancing on strong preliminary Markit PMIs for June. The figures, however, were mixed with manufacturing up and services down, dragging the composite reading to a five-month low for the whole region, as the situation replicated in Germany and other major economies.
The composite Markit Eurozone PMI fell from a t six-year high of 56.8 in May to a five-month low of 55.7 in June according to flash estimates, while the manufacturing index surged to 57.3 from previous 57.0, whilst the services one was down to 54.7 from 56.3, also the lowest in five months. In the US, the macroeconomic calendar will be busy, with flash PMIs for June, New Home Sales for May and multiple Fed's speakers scheduled to hit the wires.
From a technical point of view, the short term picture has turned positive, albeit the pair continues trading in slow motion. The 4 hours chart shows that the price continues advancing above its 20 and 200 SMAs, both converging around 1.1150/60, while technical indicators aim north within positive territory. The 100 SMA continues capping the upside around 1.1220, the level to surpass to confirm additional gains ahead, with the next resistances at the 1.1250 region and 1.1300. Below 1.1150, chances will turn towards the downside, with the next support in the 1.1110/20 price zone.
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