EUR/USD is starting the week trading oscillating around the 1.36 level. There was an initial dip and rally to 1.3615, but EUR/USD fell after a manufacturing and services PMI data from Eurozone countries.
The PMIs showed contraction in French manufacturing and services, and at a faster rate than in May and worse than economists forecast. German and Eurozone as a whole showed growth, but the numbers were slightly underwhelming. This shouldn’t be a significant mover, but it did give the market an excuse to keep EUR/USD pressured.
A break below 1.3570 would clear last week’s rising trendline, which would expose last week’s low at 1.3513. This bearish scenario also has the 1.3476 2015-low in sight.
However, if traders bring EUR/USD above 1.3620, it is likely first to challenge last week’s high at 1.3643. Then, the June highs are just above, at 1.3670-1.3676. A new high on the month would also form a price bottom, and suggest the bullish outlook if price can hold above 1.36 on a subsequent dip.
(EUR/USD 4H chart, 6/23)
For now, the market is neutral to bearish in the 1H and 4H charts. We will be getting Flash Manufacturing PMI (June)and Existing Home Sales (May) data at 9:45 and 10:00 New York time (GMT – 4). Let’s see which of the converging trendlines in the 1H chart will EUR/USD break after these releases.
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