EUR/USD Daily Forecast – Euro Holds Steady After Manufacturing DataEUR/USD has fallen into a consolidation after a sharp rise in late trading on Friday. The pair was little moved following Manufacturing PMI data which showed a slight improvement overall.
Manufacturing PMI Data Brings Hope for an Uptick in the Euro Economy
Several of the Euro area economies reported manufacturing figures in early trading on Monday. On balance, most of the economies showed a slight improvement.
France is the only economy reporting today that held in expansionary territory. The report was upbeat with a rise in production and job creation. Spanish figures, while showing improvement, continue to remain a drag on the economy and will ultimately weigh on GDP. In Italy, manufacturing worsened as new export orders fell the most it has in nearly eight years.
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The German and Eurozone figures were a bit more upbeat and these are the two reports the markets tend to pay the most attention to. German data improved to a five-month high causing some optimism that an interim low might be in. However, it is important to consider that the manufacturing PMI hit a high of 63.3 at the start of 2018 and has been steadily declining since. Today’s print of 44.1 was an improvement from the prior month’s reading of 42.1 but it remains in contraction.
The Eurozone report was optimistic, heavily referencing the uptick in Germany. PMI figures improved for a second straight reading to 46.9, ahead of the analyst estimate of 46.6.
EUR/USD showed strong upward momentum on Friday but faces some major resistance.
The resistance comes from a rising trendline that originates from the October low. The pair broke below this trendline last week and is now retesting it. Further, the 50 and 20-day moving averages currently fall slightly above the trendline to create a strong confluence of resistance.
On a 4-hour chart, the 50 moving average is in play to offer further resistance. Near-term support for the pair is seen at 1.0989 as this level held the pair higher in November on two tests.
- EUR/USD prices have lost upward momentum after a sharp rise in late-day trading on Friday.
- The pair faces significant resistance in an area between 1.1030-1.1040.