The US dollar surge continued during this week as well, as it was seen trading higher against most major currencies, including the Euro. The Euro was one of the worst performers against the US dollar recently. There were two main reasons for the decline in the EURUSD pair. The first one was the disappointing economic data in the Euro zone, and the second was one the encouraging economic data in the US. So, it was a double dent for the EURUSD pair. The pair failed to move above the 1.3430-40 resistance area, which resulted in a move lower. The pair also broke the 1.3380 support area to set new lows.
German Services PMI
The first major release this week for the Euro was the German services PMI, which was released by the Eurostat. The forecast was of a rise from 54.6 to 56.6. The outcome exceeded the expectation, but it was unable to encourage the Euro buyers. The report mentioned that July’s survey data pointed to a continuation of strong service sector growth in Germany.
Euro Zone Services PMI
The next in line was the Euro zone services PMI, which was also released by the Eurostat. The market was again expecting a rise from 52.8 to 54.4. However, the outcome was a touch lower than expected, and registered a reading of 54.0. It was not at all on the bad side, but it also failed to impress the Euro buyers. They were searching for better readings. The Euro was seen trading lower after the release, and traded below the 1.3400 support level. The report mentioned that the Eurozone economic growth accelerated at the start of the third quarter.
US ISM Non-Manufacturing Index
The major release yesterday was the US ISM Non-Manufacturing Index, which was released by the Institute for Supply Management (ISM). The market was expecting it to rise from 56.0 to 56.3. However, the outcome was way above the expectation, as the US ISM Non-Manufacturing Index jumped to 58.7. The most important thing to note here is that this is the highest reading for the index since its inception in January 2008, and Non-Manufacturing Business Activity Index increased to 62.4 percent, which highlights the 60th consecutive month of growth.
So, overall the data was on the positive side for the US dollar. The EURUSD pair crashed to trade around the 1.3350 level. Other pairs such as USDJPY and USDCHF surged higher taking the advantage of the US dollar strength.
Technically, the 1.3400-10 might now act as a strong resistance for the pair, and there are chances that the pair could continue trading lower. There is a critical support on the way down for the pair around the 1.3310-20 level. The mentioned level might act as a pivot zone for the pair, and it would be interesting to see whether buyers emerge around the stated area.
So, keep an eye on all the important levels friends and trade accordingly.
Get my Daily Market forecast with trade opportunities HERE: Vladimir’s Markets Forecast
