eur-usd
EURUSD Slips Lower Despite Stronger Eurozone Manufacturing
Skerdian Meta•Wednesday, July 24, 2024•2 min read
EURUSD made a strong bullish move from late June until the middle of July, but since last week the price has been falling, indicating a bearish reversal. Following the latest ECB meeting, we anticipated that the EUR/USD would drop closer to 1.08 rather than climb towards the critical 1.10 level, given the deteriorating economic outlook for the Eurozone. This forecast appears to be unfolding as the EUR/USD fell below 1.0850 yesterday.
![Eurozone Manufacturing PMI for July](data:image/svg+xml,%3Csvg%20xmlns='http://www.w3.org/2000/svg'%20viewBox='0%200%20800%20526'%3E%3C/svg%3E)
In the first half of July, EUR/USD rose to 1.0948, primarily due to USD weakness, as the Euro had limited positive drivers. The pair plunged after breaching the 50 SMA, resulting in a squeeze between two moving averages. Instead of rising further, the pair slid lower during the US session as buyers transitioned to sellers. The price declined from around 1.0900 to a low of 1.0843 today. This drop, following an upward trend from the June low, suggests that the selling pressure is significant and persistent.
EUR/USD Chart H4 – MAs Are Getting Broken
However, yesterday’s decline found support precisely at the 100 SMA (green) on this timeframe. Traders are now awaiting the July Manufacturing and Services PMI reports from Germany and the Eurozone during the European session, followed by the US Manufacturing and Services PMI reports in the US session.
Latest Data from Ifo – 25 July 2024
- Germany July Ifo Business Climate Index: 87.0 (vs 88.9 expected; prior 88.6)
- Current Conditions: 87.1 (vs 88.5 expected; prior 88.3)
- Expectations: 86.9 (vs 89.0 expected; prior 89.0; revised to 88.8)
This week’s data from the euro area has been notably weak, underscoring deteriorating business conditions in Germany and a worsening economic outlook. Given these indicators, there is a compelling argument for a rate cut by the European Central Bank (ECB) in September if the economy continues to underperform. However, this decision will also depend heavily on upcoming inflation data, which will play a critical role in shaping the ECB’s monetary policy response.
EUR/USD Live Chart
EUR/USD
Skerdian Meta
Lead Analyst
Skerdian Meta Lead Analyst.
Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.
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