EURUSD Turns Range Bound Ahead of Preliminary PMI Data Update

The EURUSD pair is currently on a range bound pattern post US dollar recovering most of yesterday’s loss by late European session. The pair recently hit a 5 month low and is currently trading flat due to lack of trigger to push it further on either direction. The DXY bounced from 93.15 back to 93.50 as US yields rose modestly. The euro is also losing ground versus the Swiss franc and the Pound affected by Italian politics. The currency pair fell a couple pips short of testing notable horizontal support at 1.1714 in the early week. The level marks a notable spike high from 2015 that had also acted as support on several declines in the second half of 2017. After turning from support, EUR/USD closed the day out in the green, printing a bullish hammer candlestick pattern in the process. The pattern often precedes a reversal of trend, but the lack of follow-through in European trading on Tuesday will be concerning for bulls.

EURUSD in Range

A sustained break of support in EUR/USD can pave the way for a decline toward 1.1641 followed by 1.1616, which marks the 2016 high. However, while above support at 1.1714, the pair has the potential to recover further. Upside resistance is found at 1.1875 and is significant, as it was respected as both support and resistance in the second half of last year. Going forward the price action for this pair is expected to gain momentum as multiple drivers come its way in the next 48 hours.

Both European market and US markets are set to see their Preliminary Manufacturing, Markit Composite & Service PMI data. Also US market will see update on home sales data, Crude Oil Inventory, FOMC minutes during American market hours while European market will see ECB’s account of Monetary Policy Meeting released during Thursday’s European market hours. While the next 48 hours offer lot of volatility for pair for placing Short term orders, the real impact of inflation PMI and Central bank updates on the pair will be visible near the end of Thursday’s American market hours which will help with placing long term trade orders. Expected support and resistance for the pair are at 1.1741 / 1.1725 / 1.1714 and 1.1788 / 1.1828 / 1.1852 respectively.