EUR/USD Forecast: Bulls hesitate near critical Fibonacci resistance
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UNLOCK OFFEREUR/USD Current Price: 1.0256
- Signs of a global economic slowdown limited the dollar’s intraday slide.
- The official US ISM Manufacturing PMI contracted to 52.8 in July, still better than anticipated.
- EUR/USD is technically bullish but needs to clear a strong static resistance level at 1.0280.
The EUR/USD pair trades at the upper end of its recent range, not far below Monday’s high of 1.0275. The dollar eased pretty much throughout the three sessions, despite more signs of a global slowdown. At the beginning of the day, China published the official NBS Manufacturing PMI, which contracted to 49 in July, worse than anticipated, while the services index came in better than expected, improving to 53.8.
S&P Global unveiled the final estimates of July Manufacturing PMIs for the EU, downwardly revising some countries' indexes but upwardly revising the German one to 49.3. The US figure for the same period was revised to 52.2 from 52.3. Finally, the official ISM Manufacturing PMI contracted less than anticipated in July, to 52.8 from 53 in June. The sub-components of the report showed that new orders contracted sharply, while prices paid decreased. Also, inventories stand at their highest levels since 1984, reflecting slowing economic progress.
Meanwhile, Wall Street seems to have lost its earnings-inspired strength. US indexes are marginally lower after posting a modest advance at the opening, limiting high-yielding currencies' bullish potential. Government bonds, on the other hand, hold around their opening levels.
On Tuesday, the calendar will remain light as the EU will not publish relevant macroeconomic figures, while the US will offer a minor job-related report. The focus remains on central banks and recession-related fears, with the Reserve Bank of Australia and the Bank of England scheduled to announce their monetary policy decisions this week.
EUR/USD short-term technical outlook
Technically, the pair is bullish but remains below a critical resistance at 1.0280, the 50% retracement of its latest daily slide measured between 1.0614 and 0.9951. Bulls have been rejected from around that level multiple times since mid-July. In the daily chart, technical indicators maintain their upward strength within positive levels, while the pair moved further above a still bearish 20 SMA. The longer moving averages, in the meantime, maintain their firmly bearish slopes far above the current level.
The 4-hour chart shows that the 20 SMA advances below the current level converging with the immediate Fibonacci support at 1.0205. The Momentum indicator edges higher within positive levels while the RSI indicator hovers around 58 without clear directional strength but still maintaining the risk skewed to the upside. Stops may have accumulated above the aforementioned Fibonacci resistance, and if those are triggered, the pair may jump towards the next one at 1.0360, regardless of the market sentiment.
Support levels: 1.0205 1.0160 1.0105
Resistance levels: 1.0280 1.0315 1.0360
EUR/USD Current Price: 1.0256
- Signs of a global economic slowdown limited the dollar’s intraday slide.
- The official US ISM Manufacturing PMI contracted to 52.8 in July, still better than anticipated.
- EUR/USD is technically bullish but needs to clear a strong static resistance level at 1.0280.
The EUR/USD pair trades at the upper end of its recent range, not far below Monday’s high of 1.0275. The dollar eased pretty much throughout the three sessions, despite more signs of a global slowdown. At the beginning of the day, China published the official NBS Manufacturing PMI, which contracted to 49 in July, worse than anticipated, while the services index came in better than expected, improving to 53.8.
S&P Global unveiled the final estimates of July Manufacturing PMIs for the EU, downwardly revising some countries' indexes but upwardly revising the German one to 49.3. The US figure for the same period was revised to 52.2 from 52.3. Finally, the official ISM Manufacturing PMI contracted less than anticipated in July, to 52.8 from 53 in June. The sub-components of the report showed that new orders contracted sharply, while prices paid decreased. Also, inventories stand at their highest levels since 1984, reflecting slowing economic progress.
Meanwhile, Wall Street seems to have lost its earnings-inspired strength. US indexes are marginally lower after posting a modest advance at the opening, limiting high-yielding currencies' bullish potential. Government bonds, on the other hand, hold around their opening levels.
On Tuesday, the calendar will remain light as the EU will not publish relevant macroeconomic figures, while the US will offer a minor job-related report. The focus remains on central banks and recession-related fears, with the Reserve Bank of Australia and the Bank of England scheduled to announce their monetary policy decisions this week.
EUR/USD short-term technical outlook
Technically, the pair is bullish but remains below a critical resistance at 1.0280, the 50% retracement of its latest daily slide measured between 1.0614 and 0.9951. Bulls have been rejected from around that level multiple times since mid-July. In the daily chart, technical indicators maintain their upward strength within positive levels, while the pair moved further above a still bearish 20 SMA. The longer moving averages, in the meantime, maintain their firmly bearish slopes far above the current level.
The 4-hour chart shows that the 20 SMA advances below the current level converging with the immediate Fibonacci support at 1.0205. The Momentum indicator edges higher within positive levels while the RSI indicator hovers around 58 without clear directional strength but still maintaining the risk skewed to the upside. Stops may have accumulated above the aforementioned Fibonacci resistance, and if those are triggered, the pair may jump towards the next one at 1.0360, regardless of the market sentiment.
Support levels: 1.0205 1.0160 1.0105
Resistance levels: 1.0280 1.0315 1.0360
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