EUR/USD Current Price: 1.0702
- May preliminary S&P Global PMIs indicated economic slowdown across Europe.
- Stocks struggle to post gains as inflation and growth concerns linger.
- EUR/USD battles 1.0700 while retaining its near-term bullish stance.
The EUR/USD pair keeps advancing on Tuesday, so far hitting an intraday high of 1.0735. The shared currency keeps benefiting from European Central Bank Christine Lagarde’s words, as the leader of the central bank made it clear that the negative monetary policy is coming to an end.
Nevertheless, macroeconomic data put a halt to the recovery as it revived growth-related concerns. S&P Global released the preliminary estimates of its May PMIs. Most European manufacturing and services indexes came in below the market’s expectation, except for the German ones, which were slightly better than April ones. The EU services PMI came down to 56.3 from 57.7 in the previous month, while the manufacturing index printed at 54.4 below the 54.9 expected. The US session will bring the S&P Global PMIs for the country, April New Home Sales and the May Richmond Fed Manufacturing Index.
Ahead of Wall Street’s open, European indexes trade in the red, although off their early lows. Demand for safety, in the meantime, is pushing government bond yields lower.
EUR/USD short-term technical outlook
The EUR/USD pair has met buyers around the 38.2% retracement of its latest daily decline at 1.0670. The daily chart shows that the 20 SMA converges with the next Fibonacci support level at 1.0545, while the longer ones maintain their bearish slopes far above the current level. Technical indicators have lost their bullish momentum, but remain within positive levels.
According to the 4-hour chart, the risk remains skewed to the upside. The pair is comfortably trading above all of its moving averages, with the 20 SMA heading firmly higher between the longer ones. Technical indicators, in the meantime, consolidate near their recent highs, with the RSI holding within overbought levels.
The 50% retracement of the aforementioned decline comes at 1.0770 a breakout level as the mid-term perspective could turn bullish once the pair establish above it.
Support levels: 1.0670 1.0615 1.0565
Resistance levels: 1.0735 1.0770 1.0810
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