EU Hamburg Commercial Bank Flash PMIs: Contraction Deceleration
The flash PMIs released by the EU Hamburg Commercial Bank indicate a deceleration in contraction across the EU’s business activity. The Eurozone experiences the slowest decline in eight months, with stabilization in the services sector counterbalancing the continued downturn in manufacturing output.
Stock Market Surge on Tech Sector Boost
Stock markets surged following solid earning reports, particularly in the tech sector. NVIDIA’s earnings report exceeded estimates, leading to increased risk appetite and boosting equities, especially in the tech sector.
EUR/USD Movement and Market Mood
EUR/USD peaked at 1.0888, buoyed by a weaker US Dollar amid positive market sentiment, particularly in Asian equities. However, the rally cooled with the release of tepid European data.
Eurozone and German PMI Figures
The Eurozone Composite PMI rose to 48.9, indicating a moderation in economic downturn, though still signaling contraction. The German PMI data showed persistent contraction, with Composite PMI falling to 46.1. Manufacturing output sharply declined, while the service sector saw milder contraction.
EUR/USD Short-term Technical Outlook
The EUR/USD pair trades a handful of pips below the 38.2% Fibonacci retracement of the 1.1139-1.0694 daily slump at 1.0865 and seems poised to extend gains beyond the intraday high. In the daily chart, technical indicators suggest a robust upward momentum after crossing their midlines into positive territory while maintaining firmly bullish slopes. At the same time, EUR/USD is currently developing above all its moving averages, with the 100 Simple Moving Average (SMA) crossing above a flat 20 SMA. The latter converges with the 23.6% retracement of the aforementioned slide at 1.0799.
As of the 4-hour chart, the EURUSD pair also exhibits a strong bullish momentum, although technical indicators have pared their rallies around overbought readings. Meanwhile, the 100 SMA is flat at 1.0780, while the 200 SMA also lacks directional strength at around 1.0840. Finally, the 20 SMA extends its advance above the 100 SMA, reinforcing the near-term bullish sentiment. The pair has room to extend gains towards the next Fibonacci level, the 50% retracement at 1.0915, should the intraday high be surpassed.
Support levels: 1.0800 1.0765 1.0720
Resistance levels: 1.0880 1.0915 1.0950