Series of Manufacturing PMI in Focus
The EUR/USD was closed at $1.1606 after placing a high of $1.1610 and a low of $1.1545. EUR/USD reversed its course on Monday and recovered most of its previous session’s losses amid the weakness of the U.S. dollar for the day.
The U.S. Dollar Index, which measures the value of the greenback against a basket of six major currencies, fell on Monday and reached as low as 93.86 due to the shifted focus of investors towards the central bank’s upcoming monetary policy meeting. The traders positioned themselves ahead of this week’s highly anticipated U.S. Federal Reserve policy meeting.
On the data front, German retail sales fell by -2.5% at 12:00 GMT, versus the forecasted 0.5%, weighing on the single currency Euro, which capitulated further gains in the EUR/USD pair. From the U.S. side, at 18:45 GMT, the Final Manufacturing PMI for October dropped to 58.4 against the anticipated 59.2 and weighed on the U.S. dollar that pushed EUR/USD higher. At 19:00 GMT, the ISM Manufacturing PMI rose to 60.8 against the predicted 60.4 and supported the U.S. dollar that limited the gains in EUR/USD.
Construction spending fell by-0.5% against the projected 0.6% and weighed on the U.S. dollar, which capitulated the gains in EUR/USD. The ISM Manufacturing Prices rose to 85.7 from 82.5 expected, bolstering the US dollar and limiting the EUR/USD's upward momentum for the day.
The influential investment bank Goldman Sachs put forward its forecast for the first post-pandemic U.S. interest rate hike by a year, to July 2022, and this prediction raised expectations about interest rate hikes. The upcoming meeting of the U.S. Federal Reserve is expected to result in the start of the tapering of its bond purchases. The meeting will also provide clues about when the central bank will increase interest rates.
EUR/USD Intraday Technical Levels
Pivot Point: 1.1587
EUR/USD - Technical Outlook
The EUR/USD currency pair is trading with a bullish bias at the 1.1609 level, having soared to complete the 50% Fibonacci retracement level at the 1.1620 level. On the higher side, a break above the 1.1612 level can expose the pair towards the 1.1632 level. Further, on the higher side, the EUR/USD pair could soar to 1.1652 and 1.1693 levels.
On the bearish side, a break below the pivot point support level of 1.1587 exposes the EUR/USD pair towards 1.1570 and 1.1540 levels. The MACD and RSI are in support of a buying trend. However, the major focus will remain on the series of manufacturing PMI figures from the Europe. All the best!
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