The Euro (EUR) inched lower against the US Dollar (USD) on Monday, decreasing the price of EURUSD to less than 1.1650 following some key economic events. The technical bias has however turned bullish because of a higher high in the recent upside rally.
EUR/USD Technical Analysis
As of this writing, the pair is being traded near 1.1649. A hurdle may be noted around 1.1700 (a short-term horizontal resistance area as well as psychological number) ahead of 1.1714 (the high of 2015) and then 1.1800 (the psychological number).
On the downside, a support can be noted around 1.1332 (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.
Markit Manufacturing PMI
Eurozone businesses started the second half of 2017 with solid growth, though declining inflation pressures could put paid to expectations of a stimulus clawback by the ECB later this year, a survey found on Monday. Years of ultra-easy policy may be bolstering growth, but inflation is still nowhere near the European Central Bank’s 2 percent target ceiling and shallower price rises this month will provide disappointing reading for policymakers. IHS Markit’s eurozone Flash Composite Purchasing Managers’ Index for July, seen as a good guide to economic growth, fell to 55.8 from June’s 56.3, still comfortably above the 50 level that separates growth from contraction. That was below median expectation in a Reuters poll for a modest dip to 56.2.
Considering the overall technical and fundamental outlook, buying the pair around current levels may be a good strategy in short to medium term.