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EUR/USD testing lows near 1.1080 on weaker PMIs

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

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

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    The offered tone surrounding the EUR keeping growing bigger in the European session, knocking-off EUR/USD to session lows below 1.11 handle.

    EUR/USD dragged by higher equities and poor PMIs

    Currently, EUR/USD trades -0.40% lower at 1.1084, flirting with session lows reached at 1.1082 last hours. The main currency pair extends the drop and now heads towards 200-DMA at 1.1026 following the release of dismal manufacturing PMI reports from Germany and from the Euro zone as a whole.

    The German manufacturing gauge dropped to 50.2 from 52.3, whilst the services measure improved marginally to 55.1 from 55.0. The Euro zone PMI eased to 51.0 in February, down from the 52.3 seen over the previous month, hitting one-year low.

    Moreover, the risk-on rally in the European equities as well as looming Brexit concerns continue to keep the EUR undermined against its US counterpart. Meanwhile, the German DAX rallies +.60%, the UK’s FTSE advances +1.20%, while the Euro Stoxx rises almost 2%.

    Looking ahead, the major will continue to get
    influenced by the sentiment on the global equities, while the USD moves ahead of the US flash manufacturing gauge will be also closely watched.

    EUR/USD Technical Levels

    In terms of technicals, the pair finds the immediate resistance at 1.1150/53 (psychological levels/ Feb 18 High). A break beyond the last, doors will open for a test of 1.1197/1.1200 (1h 200-SMA/ round number). On the flip side, the immediate support is placed at at 1.1068/64 (Feb 18 & 19 Low) below which at 1.1026 (200-DMA) could be tested.
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