EUR/USD Analysis: under pressure after failing to regain 1.1600
EUR/USD Current price: 1.1535
- Tensions around the Italian budget deficit continue, pressuring the common currency.
- US services sector growth to highlight the US session.
The EUR/USD pair traded as high as 1.1593 so far this Wednesday, now heading into Wall Street's opening around 1.1535, down for the day as the dollar is finding renewed support on a solid US ADP survey, showing that the private sector added 230K new jobs in September, largely surpassing the previous 163K and the expected 185K. Earlier today, the final version of the EU Markit Composite PMI showed that the manufacturing sector led growth slowdown in September, with the index down to 54.1 vs. the August reading of 54.5. The Services Index was confirmed at 54.7.
Tensions surrounding Italy continues. The local government has confirmed the deficit budget of 2.4%, and the EU responded through European Affairs Minister Pierre Moscovici, who said that such deficit risks breaking EU rules. Still pending of release in the US are the ISM Non-Manufacturing PMI, expected at 58.0 from the previous 58.5, and the final Markit Services PMI for September will also be out, seen unchanged from the previous estimate at 52.9.
Meanwhile, the pair is technically bearish according to the 4 hours chart, as the intraday advance met sellers around a bearish 20 SMA, which extends its decline below the larger ones, as technical indicators retreat from their midlines, slowly grinding lower. The weekly low at 1.1504 is the immediate support, ahead of the 1.1460/70 region, while the ongoing downward potential could only be reversed on solid gains beyond the 1.1625 region.
Support levels: 1.1505 1.1470 1.1425
Resistance levels: 1.1550 1.1590 1.1625
Author
Valeria Bednarik
FXStreet
Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.
