- The leg lower in EUR/USD extends to the 1.1740 region.
- Final Manufacturing PMIs in the euro area are due later on Monday.
- US ISM Manufacturing takes centre stage later in the NA session.
Sellers remain in control of the markets at the beginning of the week and are now dragging EUR/USD to test fresh 2-day lows in the 1.1740 zone.
EUR/USD weaker on profit taking, dollar recovery
EUR/USD has started the week on the negative footing and is adding to Friday’s losses below the 1.18 yardstick, all amidst the generalized profit taking sentiment and the broad-based recovery of the greenback.
In fact, overbought conditions in EUR/USD following the July’s rally have mainly triggered the ongoing knee-jerk, which expected to meet contention I the 1.17 neighbourhood, area coincident with a Fibo level (of the 2017-2018 upside).
In the meantime, market participants continue to look to the gradual progress of the recovery in the region along with the unabated advance of the coronavirus pandemic.
Also sustaining the upbeat sentiment in the currency, speculative net longs rose to levels last seen in late December 2011 during the week ended on July 28, according to the latest CFTC Positioning Report.
Later in the session, the final Manufacturing PMIs in the euro bloc are due. Across the pond, the ISM Manufacturing should grab all the attention seconded by Markit’s final gauge for the month of July and speeches by FOMC’s Bullard and Evans.
What to look for around EUR
EUR/USD recorded fresh tops just above the 1.19 yardstick at the end of last week, confirming once again the solid momentum around both the single currency and the rest of its risky peers. The sharp move up, while largely triggered by broad-based dollar-selling, has found extra sustain in auspicious results from the domestic docket, in turn supporting further the view of a strong economic recovery following the coronavirus fallout. Also lending wings to the momentum around the euro, the recently clinched deal on the European Recovery Fund helped putting political fears within the region to rest (for now), while the solid position of the current account in the region adds to the rally.
EUR/USD levels to watch
At the moment, the pair is losing 0.19% at 1.1753 and faces immediate support at 1.1709 (38.2% Fibo of the 2017-2018 rally) followed by 1.1495 (monthly high Mar.9) and finally 1.1448 (50% Fibo of the 2017-2018 rally). On the other hand, a breakout of 1.1909 (2020 high Jul.31) would target 1.1996 (high May 14 2018) en route to 1.2032 (23.6% Fibo of the 2017-2018 rally).
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
EUR/USD stays weak near 1.0650 ahead of Eurozone PMI data
EUR/USD remains on the back foot near 1.0650 in European trading on Tuesday. Resurgent US Dollar demand amid a cautious risk tone weighs on the pair. Investors stay wary ahead of the preliminary Eurozone and US business PMI data.
GBP/USD eases below 1.2350, UK PMIs eyed
GBP/USD is dropping below 1.2350 in the European session, as the US Dollar sees fresh buying interest on tepid risk sentiment. The further downside in the pair could remain capped, as traders await the UK PMI reports for fresh trading impetus.
Gold price flirts with $2,300 amid receding safe-haven demand, reduced Fed rate cut bets
Gold price (XAU/USD) remains under heavy selling pressure for the second straight day on Tuesday and languishes near its lowest level in over two weeks, around the $2,300 mark heading into the European session.
PENDLE price soars 10% after Arthur Hayes’ optimism on Pendle derivative exchange
Pendle is among the top performers in the cryptocurrency market today, posting double-digit gains. Its peers in the altcoin space are not as forthcoming even as the market enjoys bullish sentiment inspired by Bitcoin price.
Focus on April PMIs today
In the euro area, focus today will be on the euro area PMIs for April. The previous months' PMIs have shown a return of the two-speed economy with the service sector in expansionary territory and manufacturing sector stuck in contraction.