EUR/USD Daily Forecast: Will Euro Break $1.11818 Resistance Amid Weak PMIs?

Monday, September 23rd, was a significant day for the Euro, with important PMI data releases from the Eurozone.

These figures are closely watched by traders because they provide valuable insights into the health of the manufacturing and services sectors, both key drivers of the economy.

For those unfamiliar, PMI (Purchasing Managers’ Index) readings give us a sense of whether these sectors are expanding or contracting, which in turn influences market sentiment and currency movements.

Breakdown of Key PMI Figures

France and Germany

Let’s start with the French data. The French Flash Manufacturing PMI edged up slightly to 44.3 from 43.9. While that’s an improvement, it’s still below the 50.0 mark, which means the manufacturing sector is contracting.

Untuk hari ini, investor mengantisipasi rilis perhitungan awal (Flash) data Manufacturing PMI dari sejumlah negara seperti Jepang, Australia, India Inggris, Jerman, Zona Euro dan AS.

*Disclaimer On

— Phillip Sekuritas (@TalkToPhillip) September 23, 2024

On the services side, the French Flash Services PMI dropped from 55.0 to 53.0. So while the services sector is still expanding, the pace has slowed a bit. These numbers might put some pressure on the Euro if the manufacturing sector continues to struggle while services lose momentum.

Turning to Germany, the manufacturing picture remains bleak. The German Flash Manufacturing PMI stayed flat at 42.4, indicating ongoing contraction. Meanwhile, the German Flash Services PMI showed a minor dip from 51.2 to 51.1, but still remained in expansion territory. Germany, being the largest economy in Europe, plays a critical role in shaping the outlook for the Euro, and these weaker manufacturing numbers might weigh on the currency if they persist.

Eurozone Overview

Across the Eurozone, the Flash Manufacturing PMI came in at 45.7, barely changing from last month’s 45.8. This means the manufacturing sector is still contracting, and not much has improved.

On the other hand, the Flash Services PMI showed a slight drop to 52.3 from 52.9, but it’s still above 50.0, meaning services are expanding—albeit at a slower pace.

These mixed results suggest that while services are propping up the Eurozone’s economy, manufacturing is dragging it down.

EUR/USD Technical Outlook

Now, let’s turn to what’s happening with the Euro (EUR/USD). The pair is currently consolidating around $1.11614 after an earlier rally. It seems like the market is waiting for more direction, and that could depend on how the upcoming data unfolds.

EUR/USD holds steady near 1.1150 ahead of key Eurozone and German PMI data. Rising expectations of more Fed rate cuts in 2024 could pressure the USD, supporting the Euro. ECB's Lagarde stresses the need for adaptable monetary policy. 📊#EURUSD #Forex #ECB #Fed #PMI

— MZXLiquidity (@MZXLiquidity) September 23, 2024

Right now, there’s some key resistance at $1.11818. If the Euro manages to break through this level, we could see it move higher, potentially reaching $1.12012 or even $1.12193. However, if it fails to clear that resistance, it might reverse course.

The pivot point here is around $1.11566, and if the pair drops below that, we could see it fall towards the immediate support at $1.11400. If that level doesn’t hold, further declines could take the pair down to $1.11166 or even $1.10893.

Key Indicators:

The RSI is at 53.12, which tells us that momentum is pretty neutral for now. There’s a slight tilt towards the bullish side, but it’s not in overbought territory.

The 50-Day EMA (Exponential Moving Average) is providing some support at $1.11566. As long as the price stays above that, we can expect the bullish trend to remain intact.

Final Thoughts

The PMI data offers a mixed outlook for the Euro. While the services sector continues to grow, albeit at a slower pace, the ongoing contraction in manufacturing could be a cause for concern.

From a technical standpoint, EUR/USD is holding within a narrow range, and the next move will likely depend on whether it breaks resistance at $1.11818 or dips below the $1.11566 pivot point.

Keep an eye on these levels—they’ll play a key role in determining the Euro’s next move.