Key Points
- The Euro surged higher against the US dollar to trade near 1.1230 before it found sellers.
- There was a crucial support trend line formed on the hourly chart of the EURUSD pair, which was broken recently for a downside move.
- The German Services PMI was released by the Markit Economics earlier during the London session.
- There was a decline from the last reading of 54.6 to 54.4 in July 2016.
Technical Analysis
The Euro climbed higher this week against the US Dollar and recently tested the 1.1234 resistance area where there was selling interest noted. The EURUSD pair moved down and broke a crucial support trend line formed on the hourly chart.
On the downside, the 21 hourly simple moving average can be seen as a support, but it may soon be cleared.
On the upside, the 1.1215 level is a resistance area, followed by the 1.1230 level where seller may appear.
German Services PMI
Earlier today during the London session, there were PMI releases in the Euro Zone. The most important one was the German PMI service, which is an indicator of the economic situation in the Germany services sector was reported by the Markit Economics.
The market is not expecting any change from the last reading of 54.6 in July 2016. However, the report was negative, as the PMI decreased from 54.6 to 54.4. The report added that “German service providers reported further growth of both output and new orders at the start of the third quarter. The respective rates of growth accelerated slightly since June and were above their respective long-run averages. Moreover, companies were encouraged to add to their payrolls, which in turn helped alleviate some pressure on operating capacity. Meanwhile, the pass through of sharply rising input costs resulted in a further increase in overall charges”.
Overall, the Euro may decline further in the near term and may test the 1.1180 support levels.
