EUR/USD Forecast: solid EU growth not enough to rescue to the EUR today
|- EU Markit indexes below expectations, but indicating solid growth continues.
- Manufacturing growth at 80-month high in the EU.
The EUR/USD pair trades marginally higher daily basis, but within Monday's range and below Friday's close, following a dull Asian session amid the absence of macroeconomic releases. Early Europe, the greenback resumed its advance across the board, albeit the common currency managed to bounce some 20 pips from the 1.1740 region, following the release of local PMIs. The preliminary Markit surveys showed that growth in the region maintained its strong momentum in October, although German figures were mixed. The services PMI came in at 55.2 against previous 55.6, while the manufacturing index came in at 60.5, beating expectations but below previous 60.6, resulting in a Composite PMI of 55.2. The three readings were the lowest in two-month. A similar picture offered the final EU figures, with only manufacturing surpassing market's expectations and hitting its highest in 80-month.
The pair trades in the 1.1760 region, with no data in the way until after Wall Street's opening, when the US Markit PMIs and the Richmond manufacturing index will be out. In the meantime, the pair presents a short-term negative tone, given that in the 4 hours chart, technical indicators have turned flat well below their mid-lines after testing late Monday oversold readings, whilst the price keeps developing below all of its moving averages, indicating that the risk remains towards the downside.
Resistances from the current level come at 1.1780, followed by the strong 1.1820/30 region. It would take a clear advance beyond this last to revert the ongoing negative tone. To the downside, the 1.1720 prize zone is the immediate support, followed by 1.1690 and the more relevant 1.1660 level.
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