The EUR/USD pair bounced modestly in the European morning, following the release of generally positive European PMIs, although the pair remains below the 1.0900 level, not far from the 7-month low set at 1.0859. Preliminary October figures show that the EU as a whole grew at it’s a fastest pace so far this year, led by Germany. The EU Markit PMI composite printed 53.7, against previous 52.6, while German one came in at 55.1, against previous 52.8, both beating expectations. Later on the day, the US will offer a couple of FED's speakers, and the preliminary Markit Manufacturing PMI.
In the meantime, the 4 hours chart shows that the pair has bounced twice from the mentioned low, on Friday and today, and that the price is already above the neckline of the small figure that has a height of 25 pips and would be complete if the pair reaches 1.0910. In the same chart, technical indicators have corrected extreme oversold conditions, but present a limited upward momentum well below their mid-lines, whilst the 20 SMA maintains a strong bearish slope above the current level, around 1.0925.
Overall, the dominant bearish trend remains firm in place and failure to regain the 1.0900 level should lead to a test of 1.0800, en route to 1.0760. Should the price recover beyond the 1.0910/20 region, the pair can correct up to 1.0960, particularly on disappointing US data.
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