EUR/USD Faces Selling Pressure on Weak Eurozone Data
EUR/USD encountered significant selling pressure during Friday's European session, driven by a string of negative developments for the Euro. The currency pair dropped to a six-week low near 1.0670 as preliminary PMI data from the Eurozone indicated a loss of economic momentum.
The HCOB PMI report, compiled by S&P Global, highlighted unexpected declines in the Composite PMI to 50.8 for June, down from the previous reading of 52.2. Although still above the 50.0 mark signaling expansion, the decline fell short of market expectations for an increase to 52.5. Manufacturing PMI continued its contraction, while the Services PMI showed slower growth compared to the previous month.
According to the report, new orders fell for the first time in four months, resulting in subdued expansions in business activity and employment. Business confidence also dropped to its lowest level since February, reflecting increasing concerns about economic prospects.
Meanwhile, investors focused on monetary policy cues from the European Central Bank (ECB). ECB Governing Council member Klaas Knot indicated comfort with market expectations of one or two additional rate cuts this year. The ECB had recently initiated its first rate cut in seven years at its June meeting, underscoring a dovish stance amid economic uncertainties.
In the trading realm, EUR/USD faced technical challenges on the hourly timeframe. The pair broke away from ascending channel lines and encountered resistance around 1.0753, highlighted within an orange rectangle on the chart. Diagonal resistance lines indicated a steeper downward slope, reflecting increasing bearish momentum.
Technical indicators such as Ichimoku, EMA, and the volume profile underscored strong bearish sentiment. EUR/USD traded below the EMA 50 after deviating from its previous uptrend. The Tenkan Sen, Kijun Sen, and Chikou Span fell below the cloud, signaling potential for continued downside movement. Moreover, trading below the value area zone (marked by pink horizontal lines) suggested that EUR may not find support for short to medium-term trades until it reclaims value above this zone.
On the oscillator front, RSI reached oversold levels, suggesting a potential reversal or support area nearing. The Stochastic Momentum Index remained in the green, indicating mixed sentiment but with a possible stabilization in downside pressure.
Looking ahead, investors awaited the US S&P Global PMIs for June, scheduled for release at 13:45 GMT. Expectations pointed towards a decline in the Composite PMI, albeit remaining above the critical 50 level, indicating slowing growth in both manufacturing and services sectors.
Today's key economic events could dictate whether EUR/USD tests crucial support levels, notably around 1.0670, highlighted within a green rectangle on the technical charts.
| Time | Currency | Event | Impact | Previous | Forecast | Actual |
|---|---|---|---|---|---|---|
| 06:00 | AUD | Judo Bank Manufacturing PMI Flash | Medium | 47.5 | 49.0 | 49.7 |
| 06:00 | AUD | Judo Bank Services PMI Flash | Medium | 50.6 | 53.0 | 52.5 |
| 06:01 | GBP | Gfk Consumer Confidence | Medium | -14 | -16 | -17 |
| 06:30 | JPY | Inflation Rate YoY | High | 2.8% | 2.5% | 2.5% |
| 06:30 | JPY | Core Inflation Rate YoY | Medium | 2.5% | 2.6% | 2.2% |
| 07:30 | JPY | Jibun Bank Services PMI Flash | Medium | 49.8 | 53.7 | 53.8 |
| 07:30 | JPY | Jibun Bank Manufacturing PMI Flash | Medium | 50.1 | 50.6 | 50.4 |
| 13:00 | GBP | Retail Sales MoM | High | 2.9% | 1.5% | -2.3% |
| 13:00 | GBP | Retail Sales YoY | High | 1.3% | -0.9% | -2.7% |
| 13:00 | GBP | Retail Sales ex Fuel MoM | Medium | 2.9% | 1.3% | -2.0% |
| 13:45 | EUR | Business Confidence | Medium | 99 | 100 | 99 |
| 14:15 | EUR | HCOB Composite PMI Flash | Medium | 48.2 | 49.5 | 48.9 |
| 14:15 | EUR | HCOB Services PMI Flash | High | 48.8 | 50.0 | 49.3 |
| 14:15 | EUR | HCOB Manufacturing PMI Flash | High | 45.3 | 46.8 | 46.4 |
| 14:30 | EUR | HCOB Composite PMI Flash | Medium | 50.6 | 52.7 | 52.4 |
| 14:30 | EUR | HCOB Manufacturing PMI Flash | High | 43.4 | 46.4 | 45.4 |
| 14:30 | EUR | HCOB Services PMI Flash | High | 53.5 | 54.4 | 54.2 |
| 15:00 | EUR | HCOB Composite PMI Flash | Medium | 50.8 | 52.5 | 52.2 |
| 15:00 | EUR | HCOB Manufacturing PMI Flash | Medium | 45.6 | 47.9 | 47.3 |
| 15:00 | EUR | HCOB Services PMI Flash | Medium | 52.6 | 53.5 | 53.2 |
| 15:30 | GBP | S&P Global Services PMI Flash | Medium | 51.2 | 53.0 | 52.9 |
| 15:30 | GBP | S&P Global Manufacturing PMI Flash | Medium | 51.4 | 51.3 | 51.2 |
| 15:30 | GBP | S&P Global Composite PMI Flash | Medium | 51.7 | 53.1 | 53.0 |
| 17:00? | EUR | Consumer Confidence | Medium | 89 | 84.5 | |
| 19:30 | CAD | Retail Sales Ex Autos MoM | Medium | 0.7% | -0.6% | |
| 19:30 | CAD | Retail Sales MoM | Medium | 0.7% | -0.2% | |
| 20:45 | USD | S&P Global Manufacturing PMI Flash | High | 51 | 51.3 | |
| 20:45 | USD | S&P Global Services PMI Flash | High | 53.7 | 54.8 | |
| 20:45 | USD | S&P Global Composite PMI Flash | High | 53.4 | 54.5 | |
| 21:00 | USD | Existing Home Sales MoM | Medium | -0.3% | -1.9% | |
| 21:00 | USD | Existing Home Sales | Medium | 4.1M | 4.14M |
This table summarizes the key economic events, their impact, previous, forecasted, and actual values
This table organizes the economic events by time, currency, event description, importance, and
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