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03/09/24
30
EUR/USD Stagnates Amid Thin Trading Ahead of Key PMI Data
The EUR/USD currency pair is trading around the 1.1050 level during the European session on Tuesday, reflecting a lack of robust recovery momentum. Despite registering marginal gains on Monday, the pair has struggled to gain momentum. The thin trading environment, largely due to the Labor Day holiday in the United States, has contributed to the stagnant movement of EUR/USD at the beginning of the week. As a result, the US Dollar remains stable as market participants adopt a cautious stance.
Later in the day, attention will turn to the ISM Manufacturing PMI data for August, which is expected to be a key influencer for the pair. Analysts anticipate that the PMI will improve slightly to 47.5, up from 46.8 in July. A reading above 50 would signal expansion in the manufacturing sector, which could bolster the USD and exert further pressure on EUR/USD. Conversely, if the PMI remains close to the expected value, investors will likely focus on the Employment Index, which suffered a significant drop to 43.4 last month, the lowest in four years. A recovery in employment figures could lift sentiment and support the Dollar, while a reading below 45 would indicate continued job losses in manufacturing, potentially benefiting the Euro.
From a technical perspective, EUR/USD has traded below the 100-period Simple Moving Average, currently resting at 1.1070, and the pair’s recent price action has formed bearish candles beneath this level. The Relative Strength Index (RSI) remains below 40, suggesting limited buying interest among traders. Immediate support for the pair is seen at 1.1040, followed by psychological support at 1.1000 and further at 1.0970, where the 200-period SMA lies. On the resistance side, levels of interest include 1.1070, 1.1100, and a static level at 1.1160.
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