EUR/USD Prediction for August 24, 2016

The EUR/USD closed well off its highs, attempting to test the August highs but failing ahead of resistance near 1.1366. The stronger than expected EU consumer confidence outcome was unable to keep the currency pair elevated, though into Friday’s Yellen speech, the exchange rate is likely to consolidate. Support is seen near the 10-day moving average at 1.1250.  Momentum has turned neutral as the MACD (moving average convergence divergence) index has started to move lower.

Eurozone composite PMI higher than expected at 53.3, up from 53.2 in the previous month. The services sector PMI rose to 53.1 from 52.9, which compensated for the dip in the manufacturing reading to 51.8 from 52.0 in the previous month. The latter reflects a sharp rise in French services sector confidence, which in turn is likely also underpinned by hopes that Paris can pick up some of London’s financial services industry if pass-porting rights and the possibility to recruit staff from across Europe should be curtailed in a post-Brexit world.