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22/11/24
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EUR/USD Plummets to Yearly Lows as Dollar Strengthens Amidst PMI Data Expectations
The EUR/USD currency pair experienced a notable decline, dropping 0.6% as the U.S. dollar gained strength. This shift has resulted in the Euro reaching its lowest values in over a year, with potential for further depreciation as the week concludes. Upcoming economic data releases, particularly the Purchasing Managers Index (PMI) figures scheduled for Friday, are expected to significantly influence market sentiment.
On Thursday, EUR/USD continued to weaken, showcasing a bearish trend that has persisted for nearly two months. The pair has recorded losses in seven out of the last eight trading weeks, prompting concerns that the Euro will continue to falter unless circumstances change that could drive its value upward.
Investors will be closely watching the HCOB PMI figures for November, which are due shortly after the European market opens. The overall Manufacturing PMI for the Eurozone is projected to remain unchanged at a contractionary level of 46.0. However, the Services PMI is anticipated to slightly improve from 51.6 to 51.8, suggesting a possible stabilization in that sector.
Meanwhile, U.S. economic data is also in focus, with expectations of a rebound in activity. The U.S. Manufacturing PMI for November is forecasted to rise from 48.5 to 48.8, while the Services PMI is likely to increase from 55.0 to 55.3. These data points could reinforce the dollar’s strength and intensify pressure on the Euro.
Currently trading around 1.0470, the EUR/USD pair remains under significant bearish pressure. The price has consistently stayed below both the 50-day and 200-day Exponential Moving Averages, confirming a pessimistic outlook following the recent formation of a death cross. Critical support exists at the psychological level of 1.0450, where buying interest may emerge. However, a break below this support could lead the pair toward 1.0400. The bearish momentum is underscored by MACD indicators, suggesting that a substantial recovery will require a decisive move above the 50-day EMA. Investors are advised to monitor the support zone closely for potential market signals.
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