Can Euro Recover After Trading Around 8-Month Low?

The Euro continued its decline against the US dollar during this week. The shared currency consolidated for a brief period above the 1.3500 support level. However, the US inflation data which was released on Tuesday sparked a push lower in the EURUSD pair. The pair recently traded a touch below the 1.3450 level. It is becoming tougher day by day for the Euro buyers to hold the downside in the EURUSD pair, as the economic data in the US continues to impress. The positive side was that the Euro zone economic data which was released earlier during the London session yesterday came better than expected, which resulted in a spike higher in the EURUSD pair.

German Manufacturing and Services PMI
The German manufacturing and services PMI figures were released yesterday by the Markit economics. The German manufacturing PMI was expected to remain stable around the 52.0 level. However, the outcome was better than expected, as the German manufacturing PMI rose to 52.9. Moreover, the German services PMI was also released, which registered a rise to 56.6, beating the expectation of 54.5. The report mentioned that the output growth picked up, driven by a solid rise in service sector activity.

The EURUSD pair was seen trading a touch higher after the release, as the pair jumped from the 1.3440 support level to challenge the 1.3470 resistance level.

Euro Zone Manufacturing and Services PMI
The Euro zone manufacturing and services PMI figures were also released yesterday by the Markit economics. The Euro zone manufacturing PMI was expected to decline from 51.8 to 51.7. However, the outcome was better than expected, as the Euro zone manufacturing PMI rose to 51.9. Moreover, the Euro zone services PMI was also released, which registered a rise to 54.4, beating the expectation of 52.7, which is a 38-month high. The report mentioned that the Flash PMI signaled rebound in Eurozone growth but French woes persist.

The EURUSD pair after the release gained more bids to trade a touch higher above the 1.3480 level.

US Initial Jobless Claims
The US Initial Jobless Claims data was released by the US Department of Labor later during the NY session. The forecast was slated for a rise of 5K from 303K to 308K. However, the report mentioned that the initial claims were 284,000, a decrease of 19,000 from the previous week’s revised level in the week ending July 19. The EURUSD pair declined a bit after the release to trim some of the London session’s gains.

Technically, the 1.3440 support level holds a lot of importance for the EURUSD pair, and if the pair bounces from the current levels, then the retest of the previous swing zone of 1.3510 is very likely. This resistance level is just around the 23.6% fib level of the last drop from the 1.3699 high to 1.3437 low. So, the Euro sellers might appear around the mentioned level.

So, keep an eye on all the important levels friends and trade accordingly.

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Happy Trading Friends!