EUR/USD Current Price: 1.1088
- Manufacturing and Services output in Europe and the US continued signal economic slowdown.
- Fed officials´hawkish words spurred recession concerns, halting the Dollar’s advance.
- EUR/USD tested the extremes of the latest range, failed to make a relevant break.
The financial world was on its toes this Thursday, as sentiment seesawed following political and economic news. The EUR/USD pair surged to a daily low of 1.1112 during the European session, underpinned by better-than-expected August Markit PMI. The bounce in figures, however, fell short of indicating that the slowdown has reached a bottom, as the economy continued to underperform, as it states the official release. The pair gave back its gains and fell to 1.1063, a fresh 3-week low. US data were far more worrisome, as the preliminary Markit Manufacturing PMI resulted at 49.9, its lowest reading in 119 months, while the Services PMI was down to 50.9, a 3-month low. Fears of a US recession escalated and the yield curve inverted once again, as a couple of Fed’s officials offered hawkish statements, somehow suggesting the US Central Bank won’t act to prevent the downturn. Earlier in the day, US President Trump took it again against the Fed through Twitter, accusing Powell & CO. on putting the US at a disadvantage against the competition.
The Jackson Hole Symposium began in the US, with worldwide policymakers flooding the news feeds. This Friday, the main event will be the scheduled speak of the Federal Reserve’s head, Jerome Powell. The EU won’t release relevant data, while the US will only publish July New Home Sales, foreseen down by 0.2% monthly basis.
EUR/USD short-term technical outlook
The EUR/USD pair bounced from the mentioned low to turn flat daily basis, consolidating in the US afternoon just below the 1.1100 figure. The failed attempt to overcome 1.1110, the 61.8% retracement of its latest daily advance, a level that has been capping the upside since last week, is a discouraging sign for bulls. The pair remains neutral in the short-term, with a slightly bearish inclination, as, in the 4 hours chart, technical indicators continue hovering around their midlines, lacking directional strength. Furthermore, the pair remains around a flat 20 SMA, and below bearish larger ones, which keeps the risk skewed to the downside.
Support levels: 1.1065 1.1025 1.0980
Resistance levels: 1.1110 1.1150 1.1195
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