Talking Points
- Euro failed once again to maintain gains and traded below a major support area of $1.0980.
- German Manufacturing Purchasing Managers Index (PMI) released by Markit Economics posted an increase from 51.5 to 51.8 in July 2015.
- Euro Zone Manufacturing Purchasing Managers Index (PMI) also registered a rise from 52.2 to 52.4 in July 2015, whereas the market was not expecting any change.
EURUSD Technical Analysis
The Euro this past week managed to climb higher and traded above the $1.1000 resistance area against the US dollar. However, there is a monster bearish trend line formed on the 4-hours chart of the EURUSD pair, which prevented further gains and pushed the pair back lower. The most important point is that the 200 simple moving average (H4) is also positioned around the highlighted trend line to act as a barrier for buyers.
There was a nasty spike lower as the pair trimmed most gains to trade below the 100 simple moving average (H4). Currently, the pair is trading near a retracement level of the last wave from $1.0892 to $1.1113. Let us see how long the pair can stay above the mentioned fib level.
On the downside, the last swing low of $1.0892 might serve as a support area and if there is a break below it, then sellers could aim for a test of $1.0850.
Fundamentals
There were some key releases lined up today in the Euro Zone, which failed to cause swing moves in EURUSD. The most important one was the Euro Zone Manufacturing Purchasing Managers Index (PMI), which captures business conditions in the manufacturing sector, released by Markit Economics.
The market was not expecting any change from the last reading of 52.2 in July 2015. However, the outcome was a positive one, as the Euro Zone Manufacturing PMI posted an increase and registered a reading of 52.4. However, there was no reaction in EURUSD. The pair continued its slide as buyers did not find the report encouraging enough for a push higher.
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Article by Tom Daly, Academy of Financial Trading
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