EURUSD Technical Outlook (Daily)
EURUSD: The USD was/is under selling pressure, on decreasing expectations of a Fed rate hike this month, following another round of US disapointing data.
The Markit Manufacturing PMI for May came in at 50.7, above the previously estimated 50.5, but down from 50.8 in April, pointing to the weakest manufacturing performance since September 2009.
US Construction Spending posted its biggest decliner in more than 5 years in April, down by 1.8% Vs expectations of a 0.6% gainer.
The ISM Manufacturing index was the only positive note of the day, up from 50.8 to 51.3 in May.
The EURUSD advanced modestly to 1.1188, the highest on this week, and consolidated into the close.
Participant’s attention will now turn towards the upcoming ECB economic policy meeting early Thursday, in where the Central Bank is generally expected to maintain its economic policy unchanged, and offer a more optimistic outlook of the economy.
The chances of a EUR sustainable rally are low, considering that the market’s expectations are focused in the 15 June US Fed meeting, and sharp price moves will wait til then.
After diving over 500 pips in May, the EURUSD seems to have found an interim bottom at the 1.1100 mark.
From a technical point of view: the 4 hours shows that the price has advanced above its 20-Day SMA that has lost the downward slope, and the technical indicators are now turning South, but within positive territory, limiting chances of a Southward move Thursday.
The pair has a strong resistance in the 1.1230/40 area the mark to break to confirm some short term gains Thursday.
Support marks: 1.1160 1.1120 1.1090
Resistance marks: 1.1200 1.1235 1.1280
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