The Euro (EUR) inched lower against the US Dollar (USD) on Wednesday, decreasing the price of EURUSD to less than 1.1800 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 1.1761. On the downside, a support can be noted around 1.1652 (a key horizontal support) ahead of 1.1639 (the low of the last major downside move) and then 1.1600 (the confluence of horizontal support as well as psychological number) as demonstrated in the given below chart.
On the upside, a hurdle may be noted around 1.2100 (a short-term horizontal resistance area as well as psychological number) ahead of 1.2176 (a major horizontal resistance) and then 1.2200 (the psychological number). The technical bias shall remain bullish as long as the 1.0839 support area is intact.
US Manufecturing PMI
The latest survey of IHS Markit indicates towards improved operating conditions throughout the U.S. manufacturing sector. The seasonally adjusted flash U.S. Manufacturing PMI index rose to 54.5 in October from September’s print of 53.1. This signals the most solid upturn in manufacturing growth since January.
Rapid rates of manufacturing production and new order growth were registered in the month. This aided in stimulated employment figures, with the pace of job creation the sharpest since June 2015. There were also positive developments with regards to export sales. Manufacturers registered the most noticeable rise in new work from abroad for 14 months.
Stronger demand for inputs and continued hurricane-related disruption led to deep pressure on supply chains in October. The latest lengthening of average lead-times among vendors was the largest since that recorded after heavy snowfall in February 2014, noted Markit.
Considering the overall technical and fundamental outlook, selling the pair around current levels may be a good strategy in short to medium term.