- German political uncertainty continues to keep the weight on the Euro.
- Unperturbed by unimpressive Euro area PMI reports.
- Will the US ISM manufacturing PMI aid the recovery in EUR/USD?
The EUR/USD pair is seen making minor recovery attempts from daily lows at 1.1626, as the US dollar faded its renewed uptick versus its main competitors, with the USD bulls now awaiting the US ISM manufacturing PMI data for the next push lower.
EUR/USD: Focus on US ISM manufacturing PMI
The spot stages a comeback and looks to regain the 1.1650 barrier, as the worries over the German political environment appear to have cooled-off, with the European equities and oil prices paring back losses.
Markets also looked past the sluggish Euro area final PMI readings, as the sentiment around the major is mainly driven by the risk trends and USD dynamics. Eurozone June final manufacturing PMI arrived at 54.9 vs. 55.0 prelim while the German June final manufacturing PMI confirmed the preliminary readout of 55.9.
More so, upbeat Eurozone unemployment rate for the month of May also offered some support to the EUR bulls, as attention turns towards the US ISM manufacturing PMI data for fresh trading opportunities in the major.
Earlier today, the reports that the German Interior Minister Seehofer is seeking to resign from his position triggered a 70-pips sell-off in the Euro versus its American rival, as markets worried over Merkel’s future amid ongoing coalition crisis in Germany.
EUR/USD Technical Levels:
Haresh Menghani, FXStreet’s Analyst, notes: “From a technical perspective, the pair is retreating from an immediate resistance marked by 38.2% Fibonacci retracement level of the 1.0341-1.2556 up-move. The mentioned hurdle nears a short-term descending trend-line, constituting towards a descending triangular formation on the daily chart and hence, might continue to cap any meaningful up-move. Hence, it would prudent to wait for a decisive break through the mentioned barrier, currently near the 1.1720 region before positioning for any additional near-term up-move for the major. A follow-through buying beyond the said resistance now seems to lift the pair beyond the 1.1800 handle towards the pre-ECB swing highs near mid-1.1800s.”
“Alternatively, weakness back below the 1.1625 immediate support, leading to a subsequent break below the 1.1600 mark, might drag the pair back towards the 1.1550-45 intermediate zone en-route the very important support near the key 1.1500 psychological mark,” Haresh adds.
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