EUR/USD extends recovery near 1.0860, PMIs ignored

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Jan 22, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
    Likes Received:
    FXStreet (Mumbai) - The EUR/USD pair is seen making recovery attempts above 1.0850 levels and remains largely indifferent to the weaker PMI reports from across Euro area economies.

    EUR/USD regains hourly 20-SMA

    Currently, the EUR/USD pair trades -0.16% lower at 1.0859, recovering from session lows of 1.0814 struck in early Europe. The main currency pair found fresh bids near 1.0830, which renewed strength to the ongoing recovery, while the US dollar sheds gains against its major competitors. The US dollar index now trades at 99.25, up 0.10% versus +0.30% previously.

    Moreover, the common currency completely ignored the dismal manufacturing PMI reports from the Euro zone and Germany and keeps its recovery mode intact. German flash manufacturing data for January was lower than expected at 52.1. The data for the 19-nation bloc also came in lower than expected at 52.3.

    However, the upside remains capped on the back of rebounding European stocks which restricts the carry unwind in the European currency. Looking ahead, markets will continue to take cues from the sentiment on the equities as well as from the oil price action ahead of a fresh set of US economic data.

    EUR/USD Technical Levels

    In terms of technicals, the pair finds the immediate resistance is seen at 1.0900 (round number/ daily high). A break beyond the last, doors will open for a test of 1.0942/50 (100-DMA/ psychological levels). On the flip side, the immediate support is placed at 1.0803 (Jan 13 Low), below which 1.0782/77 (daily S1/ Jan 21 Low) could be tested.
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