The EUR/USD pair advanced for the fourth day in a row on Monday after the release of EU and US PMIs, as the greenback struggles to find demand across the board, with the DXY dropping below 105.30 to its lowest level in nearly a month.
At the time of writing, the EUR/USD trades at 1.0260, 0.33% above its opening price, reaching an 11-day high of 1.0275.
The euro shrugged off disappointing June retail sales data from Germany – which fell by 8.8% YoY and missed the market’s consensus – and EU manufacturing PMI, which contracted to 49.8 in July from 52.1 in June, showing the first contraction (below the 50-point threshold) since June 2020. However, the contraction was slightly above the preliminary estimates of 49.6.
Across the pond, recession fears in the US continue to mount as the manufacturing sector registered a weak improvement in operating conditions during July. The US Manufacturing PMI came in at 52.2, down from June’s 52.7, and according to the report, the decrease in the headline figure was in part linked to a renewed drop in production during July as output fell for the first time in two years.
From a technical perspective, the daily chart shows a short-term bullish bias for the EUR/USD, as the pair finally established itself above the 20-day SMA. At the same time, the indicators remain positive.
The RSI pierced through its midline while the MACD continued to print higher green bars, indicating increasing buying interest.
The next resistance levels for the EUR/USD are seen at the 1.0300 psychological level, followed by the 1.0350-60 area (previous support turned resistance) and then the 1.0400 mark. On the downside, immediate support could be found at the 20-day SMA, currently at 1.0160, followed by 1.0100 and the 1.0000 mark.