EUR/USD Dips Below 0.9900 As U.S. Traders Return From Labor Day
The EUR/USD pair falls for a second straight day as the U.S. dollar gathered renewed strength on the back of mixed domestic data as traders returned from the three-day weekend. At the same time, disappointing German Factory Orders figures fueled the euro sell-off.
At the time of writing, the EUR/USD pair is trading at the 0.9905 zone, 0.23% below its opening price, after bottoming at a new cycle low of 0.9864.
Like European figures, U.S. July's S&P Global Composite and Services PMIs were downwardly revised to 44.6 and 43.7, respectively, missing estimates. On the other hand, the Institute for Supply Management (ISM) released optimistic data as the Services PMI jumped to 56.9 in August from its previous reading of 56.7, beating the market's consensus of 55.1. The Services Employment and New Orders Indexes also showed good results for the same period; they came in at 50.2 and 61.8, respectively, both above expectations.
After the data, the U.S. dollar, measured by the DXY index, jumped to a fresh cycle high of 110.55, which was last visited in August of 2002.
Across the pond, the euro struggled to find demand as weak data from Factory Orders from Germany in July were published during European hours. The Deutsche Bundesbank released its indicator that includes shipments, inventories, and new and unfilled orders, which decreased by 1.1% MoM, well above the consensus of a 0.5% decline, as inflation and the uncertainty about energy supplies continue to undermine Europe's largest economy.
Looking ahead, the European Central Bank will announce its rates decision on Thursday, with investors likely to remain sidelined ahead of the event.
According to the daily chart, the EUR/USD short-term technical outlook remains bearish. The RSI gained a negative slope and leaps forward towards the oversold area, while the MACD prints higher red bars indicating that the bears remain in control.
On the downside, the following support levels are seen at today's cycle low of 0.9864, followed by the 0.9800 and 0.9700 psychological levels. On the other hand, resistance levels stand at parity, then at the 20-day SMA at 1.0057 and above the 1.0100 psychological level.
At the time of writing, the EUR/USD pair is trading at the 0.9905 zone, 0.23% below its opening price, after bottoming at a new cycle low of 0.9864.
Like European figures, U.S. July's S&P Global Composite and Services PMIs were downwardly revised to 44.6 and 43.7, respectively, missing estimates. On the other hand, the Institute for Supply Management (ISM) released optimistic data as the Services PMI jumped to 56.9 in August from its previous reading of 56.7, beating the market's consensus of 55.1. The Services Employment and New Orders Indexes also showed good results for the same period; they came in at 50.2 and 61.8, respectively, both above expectations.
After the data, the U.S. dollar, measured by the DXY index, jumped to a fresh cycle high of 110.55, which was last visited in August of 2002.
Across the pond, the euro struggled to find demand as weak data from Factory Orders from Germany in July were published during European hours. The Deutsche Bundesbank released its indicator that includes shipments, inventories, and new and unfilled orders, which decreased by 1.1% MoM, well above the consensus of a 0.5% decline, as inflation and the uncertainty about energy supplies continue to undermine Europe's largest economy.
Looking ahead, the European Central Bank will announce its rates decision on Thursday, with investors likely to remain sidelined ahead of the event.
According to the daily chart, the EUR/USD short-term technical outlook remains bearish. The RSI gained a negative slope and leaps forward towards the oversold area, while the MACD prints higher red bars indicating that the bears remain in control.
On the downside, the following support levels are seen at today's cycle low of 0.9864, followed by the 0.9800 and 0.9700 psychological levels. On the other hand, resistance levels stand at parity, then at the 20-day SMA at 1.0057 and above the 1.0100 psychological level.
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