Euro Rebounds After Poor Eurozone PMI Data
InstaForex Group | Jun 24, 2022 03:47AM ET
The EUR/USD pair declined and later on rebounded to the levels it opened yesterday morning. Such developments came as no surprise bearing in mind forecasts of flash PMIs. However, the currency pair made a broader move than expected.
The PMIs for both Europe and the US were reported much worse than projected. The first portion of data was for the eurozone. The manufacturing PMI dropped to 52.0 from 54.6 whereas economists had predicted a more modest decline to 54.0.
Likewise, the services PMI fell to 52.8 from 56.1, much sharper than the forecast for 55.8. As a result, the composite PMI slumped to 51.9 from 54.8, much worse than the expected dip to 54.2.
The data for the US was no better. For example, the manufacturing PMI plummeted to 52.4 from 57.0. It fell short of expectations of a decrease to 56.0. The services PMI contracted to 51.6 from 53.4 whereas the forecast was about 53.0. In turn, the US composite PMI dropped to 51.2 from 53.6, weaker than the expected 52.8.
The economic calendar is absolutely empty today. Therefore, market developments will be driven entirely by technical factors. Traders again cut short positions on EUR/USD at about support of 1.0500. This caused a slowdown in the downward cycle and a logical rebound.
The RSI technical instrument is fluctuating within the deviations of a 50-day moving average on the 1-hour and 4-hour charts. It means sideways trading. The D1 RSI is moving in the indicator’s lower area of 30/50. It signals a downtrend.
Moving averages on the H1 and H4 Alligator are intersecting, thus indicating the flat market. The D1 Alligator signals the downtrend in the medium term. EUR/USD is oscillating in the range between 1.0500 and 1.0600. The move is closely watched by speculators.
Get The News You Want
For the time being, the bull and bear forces are in equilibrium. Once the currency pair is in motion, the flat market will be over. As soon as EUR/USD gains momentum, it will escape the trading range in a certain direction. The price will generate a trading signal at the moment it settles beyond a certain border on the daily chart.
Complex indicator analysis provides a buy signal for intraday trading and for the short term because the price rebounded off 1.0500. Technical indicators suggest the downtrend in the medium term.
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.