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EUR/USD Forecast: Downside Limited By 1.1065

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EUR/USD Forecast: Downside Limited By 1.1065

EUR/USD Current Price: 1.1144

  • Risk sentiment underpinned the shared currency, but data prevent it from rallying.
  • US manufacturing output and services activity holding to expansion territory.
  • EUR/USD holding above 1.1100, downside limited by 1.1065.

The EUR/USD pair edged marginally higher this Monday, underpinned by a generally good mood among investors, the result of the announcement of phase one of the US-China trade deal. The shared currency’s advance was capped by dismal local data, as the December preliminary estimate of Markit Manufacturing PMI fell in the EU, with the German index at 43.4, a 2-month low, and that of the EU at 47.4, its lowest since 2013. The services sector saw a modest bounce in the same period, with the EU index hitting a 4-month high of 52.4.

US data, on the other hand, was upbeat as the Markit Manufacturing PMI came in at 52.5 as expected, while the Services index resulted upbeat at 52.2, leaving the Composite PMI at 52.2. The NY Empire State Manufacturing Index for December, which rose by less than anticipated, printing at 3.5, up from the previous 2.9. This Tuesday, the EU will have a light calendar as it will only publish the October Trade Balance,  while the US calendar has nothing of interest to offer.

EUR/USD Short-Term Technical Outlook

The EUR/USD pair has failed to extend its gains above the 23.6% retracement of its December advance, heading into the Asian session with a neutral-to-bullish stance, as, in the 4-hour chart, a bullish 20 SMA led the way higher, providing support. Technical indicators, however, lack directional strength, stuck to neutral levels. A break through 1.1110, the daily low and the 38.2% retracement of the mentioned rally could see the pair falling toward 1.1065, while bulls could take over on renewed buying interest beyond 1.1180.

Image by angelo luca iannaccone from Pixabay

Posted-In: EUR/USDNews Eurozone Commodities Forex Global Markets General

 

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