EUR/USD: Fiber has lost its upward trajectory, eyes PMIs and Lagarde speech

EUR/USD is on the defensive, having dived out of key ascending trendline.
President Lagarde on Thursday said risks to the outlook remain on the downside.
German and Eurozone PMIs will likely guide the price action on Friday.

Omkar Godbole FXStreet Contributor

EUR/USD fell to seven-week lows on Thursday, breaching support of the trendline connecting Oct. 1 and Nov. 29 lows.

With the downside break of the trendline, the single currency has lost its upward trajectory.

Markets offered euros on Thursday after the European Central Bank (ECB) was seen as more dovish than expected after President Lagarde told a news conference that risks to Eurozone growth are tilted to the downside.

Eyes preliminary PMIs

Germany's Markit Manufacturing PMI for January is forecasted to have risen slightly to 44.5 in January from December's 43.7. Meanwhile, Eurozone's Manufacturing PMI for January is expected to print at 46.8 versus December's 46.3.

A below-forecast reading would validate Lagarde's concerns regarding downside risks to the Eurozone economy and strengthen the bearish pressures around the common currency. In that case, EUR/USD could test support at 1.0981 (Nov. 29 low).

The single currency may find takers if the PMI numbers beat estimates by a big margin, although the bearish outlook would be invalidated only if the pair manages to close above Thursday's high of 1.1109.

Apart from the German and Eurozone PMI numbers, the pair may also take cues from the ECB President Lagarde's speech, due at 10:30 GMT and the US Manufacturing PMI, scheduled for release at 14:45 GMT.

The pair is currently trading near 1.1050, having hit a seven-week low of 1.1036 on Thursday.

Technical levels

EUR/USD

Overview
Today last price	1.1051
Today Daily Change	-0.0005
Today Daily Change %	-0.05
Today daily open	1.1056

Trends
Daily SMA20	1.114
Daily SMA50	1.1104
Daily SMA100	1.1073
Daily SMA200	1.1133

Levels
Previous Daily High	1.1109
Previous Daily Low	1.1036
Previous Weekly High	1.1173
Previous Weekly Low	1.1086
Previous Monthly High	1.124
Previous Monthly Low	1.1002
Daily Fibonacci 38.2%	1.1064
Daily Fibonacci 61.8%	1.1081
Daily Pivot Point S1	1.1025
Daily Pivot Point S2	1.0994
Daily Pivot Point S3	1.0952
Daily Pivot Point R1	1.1098
Daily Pivot Point R2	1.114
Daily Pivot Point R3	1.1171

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

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