EUR/USD Forecast: Corrective decline, bulls still lead
- 1st June 2020
- Posted by: Hakeem
- Category: FOREX LATEST NEWS DAILY, FOREX MARKET ANALYSIS, TECHNICAL ANALYSIS
EUR/USD Current Price: 1.1106
- EU Markit Manufacturing PMI signaled a considerable rate of contraction in operating conditions.
- US ISM Manufacturing PMI foreseen at 43 in May from 41.5 in the previous month.
- EUR/USD holding above 1.1100, bears could take over once below 1.1060.
A weakened greenback helped EUR/USD reach 1.1153 this Monday, its highest in over two months. The market is dumping the greenback amid mounting tensions between the US and China, and civil unrest in the world’s largest economy. Early Europe, rumours made the round about China said to halt some US agricultural goods’ imports, a result of President’s Trump pressure on the country over the origins of the coronavirus pandemic and Hong Kong.
The pair eased from the mentioned high following the release of the final versions of Markit Manufacturing PMIs, as for the whole Union, the index was downwardly revised to 39.4. Despite it was better than the recover low of 33.4 posted in April, “the index still indicated a considerable rate of contraction in operating conditions,” according to the official report. Markit will shortly unveil the final version of the US manufacturing index, seen at 39.8, while the country will publish the official ISM Manufacturing PMI, expected at 43 from 41.5 in the previous month.
EUR/USD short-term technical outlook
The EUR/USD pair is correcting overbought conditions, but far from bearish, according to the 4-hour chart, as it remains well above a firmly bullish 20 SMA, which provides intraday support at 1.1060. Technical indicators ease from daily highs in overbought levels, holding far above their midlines. Bulls could get uncomfortable if the pair losses the 1.1060 support, in which case the retracement could extend down to 1.1020.
Support levels: 1.1060 1.1020 1.0970
Resistance levels: 1.1120 1.1150 1.1190