EUR/USD hits fresh tops above 1.1400 on poor US ISM

The pair advances beyond 1.1400 following US ISM Manufacturing.
The greenback erases part of its early gains and returns to 96.50.
US ISM Manufacturing disappointed expectations at 54.1 in December.

Pablo Piovano FXStreet

The better tone in the shared currency remains well and sound in the European evening and is now pushing EUR/USD to print fresh tops in the 1.1400 neighbourhood.

EUR/USD stays bid near 1.1400

The pair continues to recover from Wednesday’s sharp sell off. Despite the nearly 1-cent rebound since yesterday’s lows, the pair should stay under pressure following the recently charted bearish ‘outside day’.

Spot is now picking up extra pace after the key US ISM Manufacturing dropped to 54.1 for the month of December, disappointing market estimates. Still in the US docket and earlier in the day, the ADP report surpassed consensus after the US private sector added 271K jobs during the last month of 2018.

Investors, however, appear somewhat skeptical regarding the results in the US docket, as they remain focused on the broader risk appetite trends instead.

What to look for around EUR/USD

Wednesday’s bearish ‘outside day’ still carries the potential of further downside along the road, although the name of the game continues to be the risk appetite trends and the rising prospects of a global slowdown. That said, rallies should remain somewhat limited for the time being, with the strong resistance still in the 1.1500/50 band.

EUR/USD levels to watch

At the moment, the pair is gaining 0.45% at 1.1393 facing the next up barrier at 1.1410 (high Jan.3) seconded by 1.1479 (100-day SMA) and finally 1.1547 (high Jan.1). On the flip side, a breakdown of 1.1309 (2019 low Jan.2) would target 1.1268 (monthly low Dec.14 2018) en route to 1.1214 (2018 low Nov.12).

Author

Pablo Piovano

FXStreet

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

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