EUR/USD turns lower on the day
The EUR/USD couldn't hold onto its earlier gains and has turned negative on the day, potentially creating a bearish signal. Its recent gains have been driven more by external factors, such as China’s efforts to stimulate its economy and weaker US data, rather than positive developments within the Eurozone. However, the Eurozone's economic data, particularly from Germany, has been disappointing, with shrinking manufacturing activity and not so great services sector. This has led to reduced optimism for the euro's future performance, especially as it tests the August high of 1.12. Without significant improvement in Eurozone data, further gains in the EUR/USD will likely be limited unless there is a substantial downturn in US economic indicators.
Technically, the EUR/USD remains in consolidation mode between resistance near 1.12 and support at 1.1100 to 1.1125. A break below this area, however, could push the pair towards 1.1000 or lower for then we will have seen the breakdown of the bullish trend, thereby creating a bearish signal.
By Fawad Razaqzada, market analyst for FOREX.com
Technically, the EUR/USD remains in consolidation mode between resistance near 1.12 and support at 1.1100 to 1.1125. A break below this area, however, could push the pair towards 1.1000 or lower for then we will have seen the breakdown of the bullish trend, thereby creating a bearish signal.
By Fawad Razaqzada, market analyst for FOREX.com
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