- The EUR/USD pair fell on one of its worst days in the second half of 2024.
- PMI indicators in the EU were generally lower than expected, and PMI indicators in the US were also lower.
- Tuesday promises to be a tranquil day on the fiber optic front.
EUR/USD trimmed its recent bullish momentum, falling half a percent on Monday. The fiber fell on one of the worst trading days of the second half of the year after pan-European Purchasing Managers Index (PMI) data broadly missed expectations, while the US PMI data print came in only slightly better.
Tuesday will be a tranquil day on the EUR/USD front, with not much data expected from either side of the Atlantic, although Federal Reserve (Fed) Governor Michelle Bowman is expected to make an appearance.
Despite the overall weakening of the US currency following the Fed’s surprise double rate cut last week, deteriorating market sentiment in favour of the euro keeps the EUR/USD pair unresolved.
The September S&P US Manufacturing PMI fell to 47.0 m/m, falling to its lowest level since July 2023, as the US manufacturing sector continues to see a bleak outlook for business activity. On the other hand, the S&P US Services PMI fell to 55.4 in September, down from 55.7 in August but beating the expected reading of 55.2.
Fed policymaker and Chicago Fed President Austan Goolsbee hit markets with tepid comments Monday morning, noting that much more interest rate changes from the Fed may be necessary. The Fed official stressed that the Fed may need to cut interest rates significantly to keep lending conditions for businesses fluid enough to keep the U.S. business landscape afloat as record stress in the U.S. labor market fizzles out.
EUR/USD Price Forecast
Fiber continues to stall at the 1.1100 handle, with bulls starting to show signs of exhaustion from battling price action at the upper end of near-term momentum. Despite intraday weakness, EUR/USD remains broadly well-tendered overall, with the pair testing yearly highs despite failing to reclaim the 1.1200 handle.
