EUR/USD Trading off the Short-term Trendline Support after European Data

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EUR/USD Trading off the Short-term Trendline Support Following European Data

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.
manufacturing and services pmis
(source: forexfactory)
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.

As you can see in the 1H chart, the pair fell back below 1.36 and held just above 1.3575 as we got started in the 6/23 US session.
EUR/USD Threatening the Short-term Trendline Support after European Data
(eurusd 1h chart, 6/23)

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.
eurusd 4h chart 6/23
(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.

To contact the reporter of this story, email Fan Yang at fan@forexminute.com
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Fan Yang has been a professional forex trader and analyst since 2007. He specializes in technical analysis and has a Chartered Market Technician designation since 2011. He was the chief technical strategist at CMSFX He was also the founder and chief currency strategist at FXTimes Over the years, Fan has not only been a trader and analyst but also an educator. As a proponent of both technical and fundamental analysis in trading, Fan advocates simplicity and discipline as key factors in making trading decisions when faced with so many "clues" and "signals". Currently Fan Yang is the chief currency analyst and webinar instructor at forexminute.com.