The Euro (EUR) inched higher against the US Dollar (USD) on Monday, increasing the price of EURUSD to more than 1.1150 following some key economic events. The technical bias has however turned bullish because of a higher high in the recent upside rally.
As of this writing, the pair is being traded near 1.1194. A hurdle may be noted around 1.1200 (a short-term horizontal resistance area as well as psychological number) ahead of 1.1296 (the high of the recent upside wave) and then 1.1400 (the psychological number).
On the downside, a support can be noted around 1.1132 (a key horizontal support) ahead of 1.0839 (the low of the last major downside move) and then 1.0800 (the confluence of horizontal support as well as psychological number) as demonstrated in the given above chart. The technical bias shall remain bullish as long as the 1.0839 support area is intact.
German Services PMI
Germany’s private-sector grew at a slower pace in June, a survey showed on Friday, mainly weighed down by weaker activity in the services sector, where the rate of expansion fell to a five-month low.
Markit’s flash composite Purchasing Managers’ Index (PMI), which tracks the manufacturing and services sectors that account for more than two-thirds of the economy, fell to a four-month low of 56.1 from 57.4 in May.
The reading undershot the consensus forecast in a Reuters poll of economists but remained well above the 50 mark that separates growth from contraction. Markit said that despite the fall, the reading still pointed to a strong growth in Europe’s largest economy.
Considering the overall technical and fundamental outlook, buying the pair around current levels may be a good strategy in short to medium term.