The pair is treading water below the 0.9900 level on Monday after seesawing throughout the day following the release of worse-than-expected U.S. and EU PMIs data.
At the time of writing, the EUR/USD pair is trading at the 0.9870 area, virtually unchanged on the day, after hitting a low of 0.9806 and a high of 0.9899 earlier in the session.
“Eurozone economic contraction intensifies in October,” read the Eurozone’s PMI report. The EU fell to a 23-month low of 47.1 in October, according to flash numbers, while both and missed the market consensus and fell to 49.9 (29-month low) and 48.8 (20-month low), respectively.
Meanwhile, across the pond, the U.S. fell to 47.3 in October, below the 49.1 expected. The services sector index fell to 46.6, missing the market’s consensus of 49.2. The also pointed to contraction in the sector as the index fell to 49.9 (28-month low) and came in below the expectations of 51.2.
As a reaction, the greenback extended last Friday’s slide, with the retreating from a daily high of 112.53 and dipping below the 112.00 level. Substantial gains in Wall Street also weighed on the dollar and favored the EUR/USD consolidation near a three-week high of 0.9899.
The European Central Bank will on monetary policy on Thursday, while the Federal Reserve will . From a technical standpoint, the EUR/USD short-term outlook is slightly tilted to the upside, according to indicators on the daily chart, gathering momentum.
At the same time, the price has printed a higher high and a higher low. The RSI remains flat above its midline, while the MACD printed a higher green bar, favoring an upward move.
On the upside, the next resistance level is seen at the 0.9900 area, followed by the 0.9950 zone, where the upper side of a downward channel drawn from February highs stands.
A break above the latter would pave the way to parity. On the downside, support levels are seen at the 20-day SMA around 0.9785, followed by the 0.9700 level and then the 0.9630 zone.
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