The bears continue to remain in control during the European session, restricting any recovery momentum seen in EUR/USD from daily lows of 1.1630.
EUR/USD bounces-off lows near 5-DMA of 1.1628
The spot stalled its recovery-mode and keeps losses, as sentiment around the Euro remains dampened by a bigger-than expected slowdown in the German and Eurozone services sector activity.
European Monetary Union Markit PMI Composite registered at 55.8, below expectations (56.2) in July
Germany Markit Manufacturing PMI below expectations (59.2) in July: Actual (58.3)
Moreover, expectations of an improvement in the US manufacturing PMI reading offers some respite to the USD bulls, keeping a check on the EUR/USD recovery.
However, the downside remains cushioned in the major on the back of a risk-aversion wave that has gripped the European markets, which lends some support to the funding currency EUR, while markets ignore the bounce in oil prices.
Later this week, the main risk event for the EUR/USD pair remains the FOMC policy decision, followed by the US advance GDP numbers, which will have a significant impact on the USD price-action in the coming days.
Buba report: German economy grew strongly in Q2
EUR/USD Technical Set-up
According to Valeria Bednarik, Chief Analyst at FXStreet, “The pair has its next intraday resistance at 1.1713, 2015 high, with a break above it exposing the 1.1740/50 price zone. A downward corrective movement could come on a downward acceleration through 1.1620, towards 1.1580, July 18th high.”
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