The EUR/USD rose to a fresh two-year high of 1.1284 in Asia as the political uncertainty in the US continued to weigh over the greenback.
Tests 23.6% Fib R of the sell-off from 2008 high
The 23.6% Fibonacci retracement level of the sell-off from 1.6038 (2008 high) to 1.0341 (Jan 2017 low) stands at 1.1685. The currency pair almost tested the key level in Asia and may convincingly break the same in favor of 1.1713 (Aug 2015 high) if the preliminary German and Eurozone manufacturing PMI beats estimates.
It’s all about PMI
The above chart clearly shows - the spike in the German manufacturing PMI and EZ PMIs in general in late 2016 boosted the appeal of the EUR as a growth currency, resulting in a five-month rally in the EUR.
The EUR/USD 14-day RSI is currently most overbought since August 2015. The weekly RSI is overbought as well. Hence, the continuation of the rally would require a better-than-expected German and EZ PMI numbers.
The preliminary German PMI, due at 7:30 GMT, is expected to show a slight slowdown in the pace of expansion of the manufacturing activity in July (expected 59.2, previous 59.6). Later in the day, the broader market sentiment and the US political situation would once again come into play.
EUR/USD Technical Levels
A break above 1.1685 (23.6% Fib R of 2008 high - 2017 low) would open doors for 1.1713 (Aug 2015 high). Two consecutive daily close above the same could yield 1.1890 (monthly 50-MA) levels. On the downside, breach of support at 1.1660 (session low) would open up downside towards 1.1607 (5-DMA) and 1.1576 (1-hour 100-MA).
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
GBP/USD rises to near 1.2540, driven by higher UK GDP
GBP/USD edged higher to near 1.2540 during Asian hours on Friday, buoyed by the release of higher-than-expected UK Gross Domestic Product (GDP) data for the first quarter.
EUR/USD: The crucial resistance level will emerge at the 1.0790–1.0800 region
The EUR/USD pair trades on a softer note near 1.0775 during the early European hours on Friday. The downtick of the major pair is supported by the renewed US Dollar demand amid hawkish comments from Federal Reserve officials.
Gold price attracts some buyers despite hawkish Fedspeak
Gold price edges higher for the second consecutive day on Friday. Weak employment data bolstered the speculation that the weakening economy would force the Fed to cut rates.
XRP tests support at $0.50 as Ripple joins alliance to work on blockchain recovery
XRP trades around $0.5174 early on Friday, wiping out gains from earlier in the week, as Ripple announced it has joined an alliance to support digital asset recovery alongside Hedera and the Algorand Foundation.
Rate cut optimism fuelled by higher US jobless claims
With Federal Reserve policy acting as the primary driver of investor sentiment in 2024, renewed optimism surrounding the possibility of rate cuts has propelled the Dow to its most significant rally since December.