EUR/USD Forecast: Euro loses bullish momentum after PMI data
- EUR/USD lost its traction after coming within a touching distance of 1.0700.
- PMI data from the Euro area showed that private sector activity continued to contract.
- A bullish action in Wall Street could limit the US Dollar's gains.
EUR/USD climbed to its highest level in five weeks near 1.0700 in the European morning on Tuesday but lost its traction following the disappointing PMI releases. Although the pair's near-term technical outlook points to a loss of bullish momentum, buyers could remain interested as long as 1.0640 support stays intact.
In the American session on Monday, retreating US Treasury bond yields made it difficult for the US Dollar (USD) to find demand and helped EUR/USD push higher. Meanwhile, the improving risk mood on news of Israel agreeing to delay a ground assault allowed the pair preserve its bullish momentum.
The data published by S&P Global, however, highlighted the worsening growth outlook in Germany and the Eurozone, causing the Euro to come under renewed selling pressure.
Euro price today
The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the weakest against the Australian Dollar.
| USD | EUR | GBP | CAD | AUD | JPY | NZD | CHF | |
| USD | 0.12% | -0.08% | -0.06% | -0.50% | -0.23% | -0.17% | 0.07% | |
| EUR | -0.12% | -0.20% | -0.18% | -0.63% | -0.36% | -0.30% | -0.06% | |
| GBP | 0.09% | 0.20% | 0.02% | -0.43% | -0.16% | -0.10% | 0.13% | |
| CAD | 0.05% | 0.17% | -0.02% | -0.44% | -0.18% | -0.12% | 0.11% | |
| AUD | 0.50% | 0.62% | 0.42% | 0.44% | 0.27% | 0.33% | 0.56% | |
| JPY | 0.22% | 0.35% | 0.15% | 0.17% | -0.27% | 0.06% | 0.28% | |
| NZD | 0.17% | 0.31% | 0.10% | 0.11% | -0.33% | -0.05% | 0.22% | |
| CHF | -0.10% | 0.06% | -0.13% | -0.10% | -0.54% | -0.29% | -0.22% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent EUR (base)/JPY (quote).
The Composite PMI in Germany and the Eurozone declined to 45.8 and 46.5, respectively, in October's flash estimate, revealing that the private sector's business activity continued to contract at an accelerating pace.
Commenting on the data, “in the Eurozone, things are moving from bad to worse," said Dr. Cyrus de la Rubia, Chief Economist at Hamburg Commercial Bank and added: "We wouldn’t be caught off guard to see a mild recession in the Eurozone in the second half of this year with two back to back quarters of negative growth."
In the second half of the day, market participants will pay close attention to PMI data from the US. In case the Composite PMI holds above 50, the immediate reaction could provide a boost to the USD.
Nevertheless, a bullish opening in Wall Street could weigh on the USD and help EUR/USD find support, even if the PMI data doesn't disappoint. At the time of press, US stock index futures were up between 0.3% and 0.5%.
EUR/USD Technical Analysis
EUR/USD faces immediate support at 1.0640 (Fibonacci 38.2% retracement of the latest downtrend). In case buyers continue to defend this level, the pair could regain its traction. In this scenario, 1.0700 (psychological level, static level, Fibonacci 50% retracement) aligns as strong resistance before 1.0750 (Fibonacci 61.8% retracement).
On the other hand, a 4-hour close below 1.0640 could attract technical sellers and open the door for an extended slide toward 1.0600 (200-period Simple Moving Average) and 1.0570 (Fibonacci 23.6% retracement).
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Author
Eren Sengezer
FXStreet
As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.
