If you’ve been watching today’s PMI releases, then you should know that manufacturing and services PMIs from France, Germany, and the Eurozone have once again highlighted the spotty recovery in the region.
Heck, both manufacturing and services PMIs in the Eurozone even registered lower index figures compared to September!
This is probably why the euro is trading lower against its major counterparts including the U.S. dollar.
EUR/USD 1-hour Forex Chart by TradingView
No wonder EUR/USD, which got a boost from a pullback from the U.S. bond yields (and lower USD) as well as marginal improvements in the Israel-Hamas conflict, turned lower today.
The pair got rejected around the R2 (1.0680) Pivot Point line just before hitting the 1.0700 psychological handle.
Think today’s catalysts will draw in enough sellers to drag EUR/USD back to its 1.0635 broken resistance area?
As you can see, the previous resistance was a key inflection point in the last few days. It even lines up with today’s R1 (1.064) Pivot Point level!
A move to 1.0640 roughly represents half of EUR/USD’s average daily volatility. This may attract some buyers especially if yesterday’s pro-risk, anti-USD sentiments extend to today’s European and U.S. session trading.
But don’t forget that we also have the U.S. manufacturing and services PMIs scheduled during the U.S. session.
If Uncle Sam’s PMIs disappoint like the other PMIs today have, or if U.S. bond yields regain their mojo, then we may see an anti-risk, pro-USD environment that could drag EUR/USD all the way to the 1.0600 area of interest.
What do you think? Are the Eurozone’s disappointing PMIs providing an opportunity to enter EUR/USD’s short-term uptrend? Or are we looking at the start of EUR/USD returning to its early October levels?
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