EUR/USD stuck in a rut below 1.17 ahead of European PMIs, US holiday

The Euro's bullish bounce from a recent low is running into stiff resistance as risk appetite remains limited, but hopeful.
Wednesday brings more Markit PMIs to the economic calendar ahead of the US holiday.

Joshua Gibson FXStreet

The EUR/USD is on an upward drift through Wednesday's early session, climbing into 1.1660 ahead of a European session that sees Markit Services PMI on the docket.

The Euro saw a steady grind higher on Tuesday, fueled by a broad-market sell-off on the US Dollar, but bullish momentum for the EUR/USD remains limited, and the pair was only able to lift from 1.1638 to 1.1657. The pair has continued to grind higher in the early Wednesday session, clipping into a high of 1.1675, but the market is seeing a minor renewal in Dollar bidding, testing the EUR/USD's current stance.

Wednesday brings a continuation of the Markit PMIs that have been printing this week, and 07:15 GMT will be kicking off with the Spanish Services PMI, forecast to decline slightly from 56.4 to 56.2; after that will be the Italian (forecast 53.3, last 53.1) and French (forecast 56.4, last 56.4) Services PMIs at 07:45 GMT and 07:50 GMT, but the key figures will be the German Services PMI (forecast 53.9, last 53.9) at 07:55 GMT, with the Euro-area Services PMI and Composite PMI shortly after at 08:00 GMT. The EU-wide Services PMI for June is expected to hold steady at 55, and the Composite PMI is also expected to hold steady at 54.8.

It's going to be a quiet session on the US side, with American institutions shuttered for the July 4th holiday, and traders will be looking towards Friday's Non-Farm Payrolls to give markets a quick volatility boost to cap off the week.

EUR/USD levels to watch

FXStreet Chief Analyst Valeria Bednarik noted that the Euro pairing is trapped between key MAs at the moment, and indicators are middling as well, lending the EUR/USD a lack of direction for the mid-week: "given that in the 4 hours chart, the pair is still developing between moving averages, with the 200 SMA maintaining its bearish slope above the current level. The Momentum indicator in the mentioned chart heads south around its mid-line, while the RSI heads nowhere at around 52. The 1.1620 level is the immediate support, with a stronger one at 1.1590, with a break below this last needed to confirm a steeper decline."

Support levels: 1.1620 1.1590 1.1550

Resistance levels: 1.1670 1.1720 1.1755

Author

Joshua Gibson

FXStreet

Joshua joins the FXStreet team as an Economics and Finance double major from Vancouver Island University with twelve years' experience as an independent trader focusing on technical analysis.

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