EURUSD Rebound But Upside Capped at 1.19

Summary:

EURUSD trades higher for the second straight day as the correction from two-year highs was short-lived. Euro is higher today against the greenback despite

EURUSD trades higher for the second straight day as the correction from two-year highs was short-lived. Euro is higher today against the greenback despite worse than expected services PMI from the European Monetary Union.

European Services PMI Below Expectations

European Monetary Union Services PMI came in at 54.7, below the forecasts of 55.1 in July. The PMI Composite registered in at 54.9, topping the expectations of 54.8.

Germany Services PMI came in at 55.6 below the estimates of 56.7 in July. The PMI Composite registered in at 55.3 below the forecasts of 55.5. The France Services PMI reported at 57.3 below the expectations 57.8 in July while the PMI Composite came in at 57.3, below the analyst’s consensus of 57.6.

Good news came from the retail sales as they return to February – pre-coronavirus levels. The European Monetary Union Retail Sales for June came in at 5.7% below the expectations of 5.9%, while the yearly reading came in at 1.3% topping the forecasts of -0.5%.

Euro continues to capitalize investor’s fears on the rising number in new coronavirus infections in the USA and the need for an additional relief package.

EURUSD Daily Analysis

EURUSD is 0.44% higher at 1.1854 as the pair approaches the two-year highs as the bullish theme continues and the pullbacks should be considered as a buying opportunity. The pair continues to hover in the overbought area for the second week, and traders should be careful as a sharp correction can’t be ruled out.

Initial resistance for the pair today is at 1.1861 the daily top. Above that, the bulls would chase the 1.1913 the high from July 31. We have to go back to May 15 to find the next resistance which stands at 1.1941.

On the other hand, intraday support stands at 1.1792 today’s low. A break below might test 1.1703 the low from August 3. More bids would emerge at 1.1583 the low from July 24.