The Euro spiked higher vs. the Dollar (EURUSD), and reached a high of 1.1116 seconds after the US ISM Non-Manufacturing PMI for November slipped to 53.9 from 54.7 prior, and lower than the 54.5 projected. The soft reading shows that the largest sector of the US economy, the US Service sector, is slowing down, and effectively trying to catch up with the slowdown we have seen in the manufacturing sector over the last few months. However, about 15 minutes after the release of the ISM Non-Manufacturing PMI, the EURUSD was down by 18 pips from its intraday high of 1.1116.
Looking beyond the near-term slide in the ISM Non-Manufacturing PMI, the index is still above the 52.6 experienced in October.
Earlier today, the EUR traded above the November 21 high and this move ended the short-term downtrend in the pair. The price might now be able to reach the next resistance level at 1.1130, followed by the October 21 high of 1.1180. However, if the price slide below today’s low of 1.1064 today’s surge might have been a false breakout, and the EURUSD might revisit the November lows at 1.0981.
Traders will also be wary to enter new positions with the UK general election looming in the next week. Any large move in the GBPUSD might translate in a strong move in the EURUSD. In the 2016 referendum the EURUSD slide by 957 pips over a few months as the GBPUSD slid by 3048 pips over the same period.