EURUSD – Euro Might Decline Further Vs USD24 October, 2016 by Aayush Jindal in EURUSD, Market Analysis, Technical Analysis
EURUSD – Euro Might Decline Further Vs USD
- The Euro faced a lot of selling pressure lately against the US Dollar, moving below the 1.0900 support area.
- There is a minor bearish trend line formed on the hourly chart of EURUSD, which may act as a resistance near 1.0880.
- Today, the Euro Zone Manufacturing Purchasing Managers Index (PMI) will released by the Markit Economics, which is forecasted to remain at 52.6 in Oct 2016 (preliminary).
- In Japan, the Nikkei Manufacturing PMI was released, which came in at 51.7 in Oct 2016 (preliminary).
EURUSD Technical Analysis
The Euro declined below 1.0900 against the US Dollar recently, and currently the EURUSD pair looks like under a lot of selling pressure having the potential for a move towards 1.0840.
We can see from the hourly chart that there was a failure to settle above the 1.10 handle, which ignited a sharp downside move in EURUSD. It declined and now formed a minor bearish trend line, which may act as a resistance near 1.0880 if the pair attempts to correct higher.
On the downside, the recent low of 1.0860 is a support zone, followed by 1.0840. One may even consider selling on rallies as long as the bearish trend line is intact.
Euro Zone Manufacturing PMI
Today in the Euro Zone, the Manufacturing Purchasing Managers Index (PMI), which captures business conditions in the manufacturing sector will be released by the Markit Economics. The market is aligned for no change in the PMI from the last reading of 52.6 in Oct 2016 (preliminary).
If there is a decline registered, then the Euro may come under further bearish pressure in the near term.
Japanese Nikkei Manufacturing PMI
Today in Japan, the Nikkei Manufacturing PMI, which gives an early snapshot of the health of manufacturing sector in Japan was published. The market was not expecting any increase in the PMI in Oct 2016 (preliminary). However, the result was positive, as there was a rise from the last reading of 50.4 to 51.7.
Commenting on the PMI report, economist at IHS Markit, Amy Brownbill, stated “Manufacturing conditions in Japan continued to improve in October. Production rose at the sharpest rate this year so far helped by a boost in sales, which have increased for the first time since January. Data suggested that a strong expansion in foreign demand led to the rise in total new orders, as new exports rose at the fastest rate in nine months”.
However, there was no major buying interest noted for the Japanese yen during the Asian session.