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James Hyerczyk
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EUR/USD

The Euro is trading higher as Euro Zone factory activity growth surged to a record high in April, boosted by burgeoning demand and driving a rise in hiring, although supply constraints led to an unprecedented rise in unfulfilled orders, a survey showed.

While a third wave of coronavirus infections in Europe has forced some governments to shutter much of their dominant service industries, factories have largely remained open, Reuter said.

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At 12:03 GMT, the EUR/USD is trading 1.2046, up 0.0025 or -0.21%.

IHS Markit’s Final Manufacturing Purchasing Manager’s Index (PMI) rose to 62.9 in April from March’s 62.5, albeit below the initial 63.3 “flash” estimate but the highest reading since the survey began in June 1997.

At 14:00 GMT, the U.S. will report ISM Manufacturing PMI. The report is expected to come in at 65.0, up from 64.7.

The EUR/USD could reverse to the downside if the US PMI number is greater than expected since investors are betting on one economy being stronger than the other economy.

Daily EUR/USD

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. The trend turned down on Friday when sellers took out the previous swing bottom at 1.2056.

The main trend will change to up on a trade through 1.2150. On the downside, the next key target is the 1.1994 main bottom.

The short-term range is 1.2243 to 1.1704. The EUR/USD is currently straddling its Fibonacci level at 1.2038. Its 50% level at 1.1974 is additional support.

The main support zone is 1.1976 to 1.1888.

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Daily Swing Chart Technical Forecast

The direction of the EUR/USD on Monday is likely to be determined by trader reaction to 1.2038.

Bullish Scenario

A sustained move over 1.2038 will indicate the presence of buyers. The first upside target is a minor pivot at 1.2082. Since the main trend is down, sellers could come in on the first test of this level. Overcoming it, could drive the common currency into 1.2150 over the short-run.

Bearish Scenario

A sustained move under 1.2038 will signal the presence of sellers. This could trigger a break into the intraday low at 1.2013, followed by the main bottom at 1.1994 and a support cluster at 1.1976 – 1.1974.

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