(MENAFN- Daily Forex) For two days in a row, the price of the eur/usd currency pair is trying to rebound to the upside. The EUR/USD gains stopped at the resistance level of 1.0385 and settled around the level of 10360 at the time of writing the analysis . I still see that the euro's gains are facing weakness factors, as the consequences of the Russian-Ukrainian war have not stopped. Advertisement want to test out mt5 for yourself? open demo now
Yesterday, Eurozone PMIs confirmed that the bloc's economy contracted in November, however, the size of the decline was less sharp than what markets had expected. The S&P Global Manufacturing Purchasing Managers' Index (PMI) came in at 47.3, higher than the consensus forecast of 46.0 and up from October's 46.4. The Services PMI came in at 48.6, which was ahead of expectations of 48 and unchanged in October. The composite PMI reading - which balances the data to give a better macroeconomic snapshot - read at 47.8, ahead of the consensus of 47 and above in October of 47.3, and a reading below 50 indicates contraction.
Chris Williamson, chief business economist at S&P Global Market Intelligence, says:“The further drop in business activity in November adds to the chances of the eurozone economy slipping into recession.”
S&P Global says the data confirms the fifth consecutive month of decline in business activity, however, the severity of the slowdown was moderate. There were some positive signs, including a lower rate of loss of new business, less supply constraints, and a pickup in business confidence in the coming year. 'However, business sentiment remained bleak by historical standards, and demand continued to decline at a sharp rate, dampening employment growth for the month,' S&P Global said.Economic Pressure Begin to Ease
Improved supply chains have meant that cost pressures in the economy are beginning to ease with companies reporting costs rising at the slowest rate in 14 months. This, in turn, allowed selling price inflation to moderate, albeit with inflation rates remaining high. Factories in Germany reported their first improvement in supplier performance since July 2020 . But Germany overall recorded the biggest decline in business in the eurozone, with a composite PMI of 46.4. Output fell in France as the Composite PMI came in at 48.8, indicating the first drop in business activity since February 2021.
For his part, Fawad Razakzadeh, an analyst at City Index, says,“The latest macroeconomic data from Europe continues to paint a bleak picture with manufacturing and services PMIs for France, Germany and the eurozone as a whole, remaining in contraction territory below 50. Although the PMI data It still manages to exceed expectations, it's only because we're seeing improvement from a very low base.”Analysis of the EUR/USD today:
According to the performance on the daily chart, the price of the euro dollar, EUR/USD, is moving within an ascending channel. Stability is above the psychological resistance 1.0400, which supports the bulls' move upwards. The technical indicators move towards overbought levels. I still prefer to sell the euro dollar from every bullish level, and the closest targets for the bulls currently are 1.0455 and 1.0520 and 1.0600, respectively.
On the other hand, according to the performance over the same time period, breaking the support level at 1.0100 will be important for the bears to control and end the current aspirations of the bulls. Today there is an American holiday that will affect the liquidity of the markets and the sentiment of investors in taking risks. From the Eurozone, the German Ifo reading will be announced.
Ready to trade our forex technical analysis ? Here are the best forex brokers to choose from.