(
MENAFN- Daily Forex) Bearish view
- Sell the EUR/USD pair and set a take-profit at 1.0985.
- Add a stop-loss 1.1140.
- Timeline: 1-2 days.
Bullish view
- Set a buy-stop at 1.1085 and
a take-profit at 1.1200. - Add a stop-loss at 1.1000.
The EUR/USD pair remained under pressure as concerns about the European economy continued. After soring to a multi-month high of 1.1200 last week, the pair retreated to the important support at 1050 economy concerns
There are concerns about the Economy as the manufacturing and industrial sectors continue deteriorating. A report by S&P Global showed that the manufacturing PMI in the region rose slightly to 45.8 in August, higher than the median estimate of 45.6.
In Italy, France, and Germany, the PMIs stood at 49.4, 43.9, and 42.5, respectively. While the numbers increased slightly, they remained below the expansion zone of 50.
Meanwhile, in a statement, Volkswagen, one of the biggest automakers in the region said that it was considering shuttering factories in Germany for the first time in decades.
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The company is facing major challenges as demand for its electric vehicles wane and as competition from other companies rose. Other European automakers will likely continue job cuts as demand wanes.
The EUR/USD pair will next react to the upcoming US manufacturing PMI numbers by S&P and ISM. Analysts expect the two numbers to show that the PMIs retreated to 48.1 and 47.5, respectively, meaning that the industry is still contracting.
The next key catalyst to watch will be the ADP private payrolls data on Wednesday followed by the official non-farm payroll (NFP) data on Friday. These numbers are important because the Fed has shifted its focus on the labor market now that inflation has retreated to below 3%.EUR/USD technical analysis
The EUR/USD exchange rate rose from a low of 1.0445 in October to a high of 1.1200 last month. It has recently pulled back and moved below the key support level at 1.1140, its highest swing on December 26.
The pair has remained above the 50-day moving average and the Ichimoku cloud. Also, the two lines of Percentage Price Oscillator (PPO) indicator have formed a bearish crossover. The Relative Strength Index (RSI) has also pointed downwards and is nearing the neutral level of 50.
Therefore, the pair may continue falling as sellers target the next point at 1.0985, its highest swing on March 8. If this happens, the pair will then resume the uptrend as the US dollar sell-off resumes.
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