- EUR/USD fell by eight tenths of a percent during the week.
- Fiber deals being crushed by gibberish speeches from ECB planners.
- The PMI data from the EU and the US published on Thursday may provide a novel impetus.
EUR/USD lost another fifth of percent on Wednesday as the Fiber Index collapses ahead of Thursday’s novel round of Purchasing Managers’ Index (PMI) data. ECB officials have downplayed economic concerns, reiterating the need to exercise caution when considering future interest rate cuts. Currency markets immediately reacted, pushing the euro further into the ground, hitting a 16-week low.
Global PMI data will be released on Thursday. Markets have high expectations for the results of the pan-European PMI survey, with the median market forecast predicting a slight augment in October’s EU services PMI to 51.6 from 51.4 in September. On the US side, the median market forecast is for October US PMI data to be mixed, with the Manufacturing PMI component expected to rise to 47.5 from 47.3, while the Services PMI component is expected to decline slightly to 55.0 from 55.2.
EUR/USD price forecast
EUR/USD continues to fall as the pair tests support near the 1.0780 level. Recent price action shows a significant break below both the 50-day EMA, currently at 1.0975, and the 200-day EMA at 1.0908, signaling a shift in market sentiment towards the bearish side. Sustained selling pressure has pushed the pair into a bearish phase, with sellers expecting further declines towards the support zone at 1.0750. A break below this key psychological level could trigger a more aggressive selloff towards 1.0700.
The MACD indicator remains firmly in bearish territory, with the MACD line continuing to trend below the signal line and the histogram deepening to negative values. This suggests that the downside momentum is still intact and any reversal attempts could face robust resistance. Traders should remain cautious of oversold conditions, but as long as the price remains below the moving averages, the bearish trend is likely to continue. Any bounce from current levels could meet immediate resistance near the 1.0900 area, making it a key level to watch for potential shorting opportunities.
