- Summary:
- Just like the other major currencies, EURUSD had a volatile start to today’s trading on skepticism about the US-China trade deal.
Just like the other major currencies, EURUSD had a volatile start to today’s trading on skepticism about the US-China trade deal. The currency pair dropped from an intraday high of 1.1280 to a low of 1.1232 after US trade adviser Peter Navarro remarked that the deal with China is over. However, EURUSD quickly recouped its losses as US President Trump calmed markets by saying that the deal is still on the table. It is now trading at 1.1268. Can the currency pair extend its gains with the euro zone PMIs due for release today?
Today’s roster of PMIs from the euro zone will begin at 8:15 am with the French services and manufacturing PMIs. The reports are eyed at 44.9 and 46.1, respectively. Then at 8:30 am GMT, Germany’s services PMI for June is seen at 41.7. Meanwhile, its manufacturing PMI is estimated at 41.5.
Finally, at 9:00 am GMT, the euro zone-wide services PMI is anticipated at 40.5 and its manufacturing PMI is seen at 43.8.
Better-than-expected numbers could help EURUSD extend its gains. Alternatively, worse-than-expected readings may weigh down the currency pair.
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EURUSD Outlook
On the 1-hour time frame, it can be seen that EURUSD is currently trading above the falling trendline (when you connect the highs of June 10, June 11, June 16, and June 22). A closer look at the most recent price action would show that the currency pair even tested the falling trendline for support. It’s also worth pointing out that EURUSD is trading above the 200 SMA which is often regarded as a reliable indicator for resistance. With that said, the recent price action on EURUSD could mean that there are buyers in the market. If this assumption turns out to be true, we could soon see the currency pair rally to its June 16 highs at 1.1352.
On the other hand, a strong bearish close below today’s low at 1.1232 could mean that there are still sellers in the market. Should this be the case, EURUSD could go all the way down to its June 22 lows at 1.1167.