EUR/USD Analysis: Navigating Economic Data and Technical Indicators Suggest Buying Over $1.0895
During Monday’s Asian trading session, the EUR/USD pair recorded modest gains, hovering near the 1.0900 mark. Despite this uptick, the pair struggles to breach the crucial 1.1000 threshold, influenced by the US Dollar Index’s (DXY) resurgence and lackluster Eurozone economic data. Market participants are now looking towards the upcoming German IFO survey for further direction.
December witnessed an unexpected decline in Eurozone business activity, signaling a probable recession in the region. The preliminary Eurozone HCOB Composite PMI fell to 47.0, down from November’s 47.6 and below the anticipated 48.0. This marks the seventh consecutive month of the PMI remaining below the 50 mark, which delineates expansion from contraction.
Additionally, the Eurozone Manufacturing PMI disappointed market expectations, dropping to 44.2, while the Services PMI declined to 48.1 from the previous 48.7, missing the forecast of 49.0. These figures suggest a potential contraction in the Eurozone’s economy for the fourth quarter, contradicting the European Central Bank’s (ECB) earlier projections. Consequently, the Euro faces downward pressure, impacting the EUR/USD pair.
In contrast, the US S&P Global Composite PMI indicated the fastest growth in five months, climbing to 51.0 in December. However, the Manufacturing PMI dipped to a four-month low of 48.2, while the Services PMI improved to 51.3.
Austan Goolsbee, President of the Federal Reserve Bank of Chicago, commented on Sunday that it is premature to consider the battle against inflation won, emphasizing that rate decisions will hinge on economic data.
Attention now turns to the German IFO surveys, anticipated to show slight improvements. Key data releases this week include the Eurozone HICP on Tuesday and the German PPI on Wednesday. The US will also release housing data, including Building Permits and Housing Starts, on Tuesday.
EUR/USD Technical Outlook
The EUR/USD pair concluded last Friday below the 1.0960 level, indicating a bearish trend on an intraday basis. The primary target is set at 1.0860. Positive signals from technical indicators suggest a potential recovery attempt, warranting caution in upcoming trades.
A breach of 1.0960 could halt the bearish momentum, potentially leading to gains towards 1.1080. Conversely, breaking below 1.0860 may extend losses to 1.0765.
Today’s expected trading range lies between 1.0830 support and 1.0970 resistance, with the trend leaning towards bearish.
EUR/USD Live Chart
ABOUT THE AUTHOR
See More
Sidebar rates
Add 3442
Related Posts
SaveAdd 3440
Join 350 000+ traders receiving Free Trading Signals
Alerts
Rates
Calendar
Signals