EUR/USD Current Price: 1.0527
- Manufacturing output in the Euro Zone contracted sharply in Q3.
- US ISM Manufacturing PMI and Chair Jerome Powell stand out in the American afternoon.
- EUR/USD resumed its decline after a modest upward correction, aims for lower lows.
The EUR/USD pair resumed its decline on Monday, following a modest uptick at the beginning of the day. The pair peaked at 1.0591 ahead of London’s opening, to slide below the 1.0550 level ahead of Wall Street’s opening. The market mood was upbeat at the weekly opening. The United States (US) avoided a government shutdown after Congress concluded a last-minute agreement, while Chinese data was generally encouraging.
The country published the official NBS Manufacturing PMI on Saturday, which rose in August to 50.2 from 49.7 in the previous month. The Non-Manufacturing PMI improved in the same period from 51 to 51.7, beating expectations. Finally, the September Caixin Manufacturing PMI printed at 50.6, while the services index came in at 50.2, below the August readings but holding within expansionary territory.
Meanwhile, S&P Global released the final estimate of the Euro Zone September Manufacturing PMIs. The German index was downwardly revised to 39.6, while the EU index was confirmed at 43.4. S&P Global will later publish the US Manufacturing PMI, while the country will release the official index foreseen at 47.7, improving modestly from the previous 47.6. Additionally, Federal Reserve (Fed) Chairman Jerome Powell will participate in a round-table discussion with community members in York.
Finally, rallying US Treasury yields boosted demand for the US Dollar. The 10-year Treasury note yielded as much as 4.64%, the highest since 2007, while the 2-year note offers 5.10% ahead of the opening, up 5 basis points (bps).
EUR/USD short-term technical outlook
The daily chart for the EUR/USD pair favors a downward extension, as technical indicators resumed their slides within negative levels after correcting the oversold conditions reached last week. At the same time, the 20 Simple Moving Average (SMA) keeps heading south far above the current level while below the longer ones.
In the near term, and according to the 4-hour chart, the risk also skews to the downside. The pair fell through its 20 SMA, while the longer ones offer firmly downward slopes far above the current level. At the same time, technical indicators head south almost vertically, with the Momentum indicator holding above its 100 level but the Relative Strength Index (RSI) indicator hovering around 38, reflecting persistent selling interest.
Support levels: 1.0485 1.0440 1.0395
Resistance levels: 1.0560 1.0610 1.0660
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
EUR/USD clings to modest recovery gains above 1.0700
EUR/USD clings to small recovery gains above 1.0700 on Monday following the previous week's slide. European political uncertainty continues to undermine the Euro and cap the pair's upside, while the US Dollar consolidates recent gains amid a tepid market mood.
GBP/USD remains pressured below 1.2700 amid cautious mood
GBP/USD stays on the back foot and trades below 1.2700 in the second half of the day on Monday. The hawkish Fed expectations and a softer risk tone keep the US Dollar afloat, exerting downward pressure on the pair. Fedspeak remains next in focus.
Gold under pressure, flirting with $2,310
Gold struggles to build on Friday's gains and trades in the red below $2,320 on Monday. The benchmark 10-year US Treasury bond yield rebound above 4.25% following last week's slide, making it difficult for XAU/USD to gain traction.
XRP stuck below $0.50 as Ripple CLO says SEC has abandoned demand for $2 billion fine
XRP struggles to make a comeback above sticky resistance at $0.50 on Monday as traders continue to assess the legal skirmishes between blockchain firm Ripple and the US Securities and Exchange Commission (SEC).
Five fundamentals for the week: French opinion polls, US Retail Sales and Bank of England eyed Premium
Politics is back, with elections in France rocking markets. US Retail Sales and flash PMIs will provide insights into America's slowdown. The Bank of England announces its decision after all-important CPI data.