EUR/USD Forecast: consolidating near the lows

The EUR/USD pair is recovering modestly from a daily low of 1.1134, at the beginning of the European morning, following the release of mixed local PMIs.

The manufacturing sector across the EU has continued improving by the end of the third quarter, with the France reading recovering expansionary levels by printing 50.6, whilst the German reading fell slightly, resulting at 52.3 compared to previous 52.3. In the EU, the September figure came out at 52, matching expectations and August figure.

Stocks advanced in Asia, maintaining the common currency subdued, but after a strong opening, European ones are losing steam, confining the pair to its daily low, as investors are not sure on where to go from here. Later on today, the US will release its own PMI figures alongside with the weekly unemployment claims, which may be even more relevant than the first ahead of the release of the Nonfarm Payrolls on Friday.

View the Live chart of the EUR/USD

In the meantime, the technical picture shows that the price has bounced from a short term ascendant trend line coming from 1.1104, but the price is well below its 20 SMA and the technical indicators in negative territory. Despite lacking bearish strength, the risk remains towards the downside, with a break below the mentioned daily low, exposing the pair to a continued decline towards the 1.1080/1.1100 region.

Should the pair recover above 1.1180, the downward risk will diminish, and the rally can extend then up to 1.1220/45, on the back of dollar's weakness.

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