EUR/USD Current Price: 1.1280
- EU Composite Output PMI improved by more than anticipated.
- US ISM Non-Manufacturing PMI missed the market´s expectations.
Wednesday was quite a busy day which ended with the greenback trading unevenly against its major rivals. Safe-haven assets appreciated amid fears central banks will have to steepen stimulus to deal with the global economic slowdown, although equities edged higher, dragging alongside commodity-linked currencies. European ones, on the other hand, edged lower with the EUR/USD pair falling after repeatedly failing to surpass the 1.1300 level. There were good news in the euro area, as the Markit Composite Output index strengthened to 52.2 in June, up from 51.8 in May, also beating the market’s expectations. Services activity was behind the recovery, improving by more-than-anticipated at the end of the second quarter. In the US, however, data was mixed, although the most relevant figures missed the market’s expectations, as the ADP survey showed that the private sector added 102K new jobs in June, less than the 140K expected, while the ISM Non-Manufacturing PMI resulted in 55.1 in June, well below the previous 56.9 and the expected 55.9. The EUR/USD pair peaked at 1.1312 with this last but quickly retreated toward daily lows in the 1.1270 price zone.
Thursday will be a lighter day, as the US markets will be closed on holidays. The EU will release only May Retail Sales, seen up by 0.3% MoM and by 1.6% YoY.
The EUR/USD pair is now defying the 61.8% retracement of its latest daily advance at 1.1270, having failed to extend gains beyond the 50% retracement of the same rally. In the 4 hours chart, the 20 SMA heads sharply lower above the current level, nearing a directionless 100 SMA. The intraday advance was rejected around the mentioned 20 SMA, building the short-term bearish case. Finally, technical indicators in the mentioned chart remain within negative levels, the Momentum directionless and the RSI resuming its slide, also supportive of a downward extension.
Support levels: 1.1270 1.1230 1.1195
Resistance levels: 1.1315 1.1350 1.1385
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