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EURUSD Climbs Above 1.0850 Ahead of U.S. PMI Data-TraderFactor

EUR/USD Drops Below 1.0850 Ahead of U.S. PMI Data

Flash Purchasing Managers’ Index (PMI) data from Europe and the United States are key economic indicators that offer insights into the health of the manufacturing and service sectors. As traders, deciphering how this data affects currency movements is pivotal for informed decision-making. This report examines the recent PMI releases and their subsequent influence on the EUR/USD and GBP/USD currency pairs.

EUR/USD Drops Below 1.0850 Amid Positive European PMI Numbers and Weakening USD

Recent Trends

Earlier, the EUR/USD has showcased strength by remaining above the 1.0850 mark, buoyed by a combination of European PMI numbers and a depreciating US Dollar (USD). German PMI data indicated an accelerated contraction within their private sector, which seems counterintuitive to the pair’s rise, yet the Eurozone’s composite PMI displayed marked improvement, climbing to 48.9 from 47.9.

Factors Affecting Movement

  • Despite somber figures in Germany, the overall European economic sentiment seems to be cautiously optimistic, reflecting in the currency pair’s favorable performance.
  • The broader downturn in the USD following the FOMC minutes, signaling uncertainties around policy easing, has also facilitated EUR’s relative strength.
  • S&P 500 and Nasdaq futures show an upsurge, reflecting a risk-on mood that typically hinders USD strength, lending support to the EUR/USD pair.

EURUSD Intraday Forecast

The EUR/USD pair is indicating a potential for further upside with an intraday bias. The recommendation is to buy with an entry price at 1.0830 and target levels at 1.0900 and 1.0925. The risk stands at 2% per trade, with the Relative Strength Index (RSI) showing upside momentum.

EUR/USD Intraday

Please note that due to market volatility, some of these key levels may have already been reached and scenarios played out.

GBP/USD Analysis: Pair Pulls Back After Surpassing 1.2700 Amid Mixed UK PMI Data

Recent Trends

The GBP/USD has retracted slightly after a spike above the 1.2700 threshold. The UK flash PMIs delivered a mixed bag, with the Manufacturing PMI falling short of expectations but the Composite PMI offering some reprieve by ticking higher to 53.3.

Factors Affecting Movement

  • The ongoing USD selling pressure underpins GBP’s climb, redirecting focus to the divergence in PMI data between the UK and US.
  • Risk appetite, indicated by significant gains in US equity futures, may continue to exert downward pressure on the USD.
  • The UK’s PMI stability suggests sustained, albeit cautious, economic growth, potentially fortifying the GBP against adverse movements.

Gold Price Analysis

Gold prices are advancing for the sixth consecutive day, attracting attention as they cross the $2,030 threshold. While the Fed maintains a hawkish stance, the weakening USD, at a three-week nadir, has facilitated gold’s ascent.

XAUUSD Intraday Prediction

Gold shows a bullish bias above 2024.00 with potential upside to 2035.00-2039.00. The recommendation is to buy with an entry price at 2024.00, and target levels at 2035.00 and 2039.00. The risk stands at 1% per trade, with the RSI suggesting a bounce

USD/CAD Intraday

USD/CAD Plummets to 1.3450 Amidst Increased Risk Appetite

In recent market developments, the USD/CAD pair has taken a nosedive to the 1.3450 mark, caused by an intensified preference for risk-sensitive assets amongst investors. The US Dollar seems unable to take advantage of the hawkish sentiment reflected in the Federal Open Market Committee (FOMC) minutes.

As the market anticipates further direction from the imminent US preliminary S&P Global Purchasing Managers’ Index (PMI) and Canadian Retail Sales data, it’s clear that both currencies are under the influence of global economic shifts.

USDCAD Intraday Prediction

The USD/CAD pair is under pressure, indicating a downward trend. The recommendation is to sell with an entry price at 1.3500 and target levels at 1.3425 and 1.3410. The risk remains at 2% per trade, with the RSI showing downside momentum.

USD/CAD Intraday

Data Interpretation for Traders

Traders should consider the following points when evaluating the impact of PMIs on currency pairs:

  • EUR/USD: Look out for more robust-than-expected PMI numbers from the Eurozone to potentially drive this pair further north. Conversely, poor figures might apply the brakes, but likely not reverse the bullish sentiment owing to the prevailing risk-on atmosphere.
  • GBP/USD: The pair’s fate will hinge partly on the UK market’s reaction to PMI data, with positive surprises likely to fuel upward momentum. Traders should also stay vigilant for USD recovery triggers or shifts in market risk dynamics that could alter the prevailing trend.
  • Gold Prices: As a traditional hedge against currency devaluation, gold’s value is inversely correlated with the USD.

Flash PMIs provide crucial economic insights that resonate through the currency markets. As PMI data is released, keep an eye on the corresponding shifts in the EUR/USD and GBP/USD pairs, while being cognizant of overarching market sentiment and risk appetite. Traders should leverage real-time economic calendars and forex news platforms to track these indicators for actionable trading strategies.

Disclaimer:

All information has been prepared by TraderFactor or partners. The information does not contain a record of TraderFactor or partner’s prices or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information. Any material provided does not have regard to the specific investment objective and financial situation of any person who may read it. Past performance is not a reliable indicator of future performance.

Author

  • Zahari Rangelov

    Zahari Rangelov is an experienced professional Forex trader and trading mentor with knowledge in technical and fundamental analysis, medium-term trading strategies, risk management and diversification. He has been involved in the foreign exchange markets since 2005, when he opened his first live account in 2007. Currently, Zahari is the Head of Sales & Business Development at TraderFactor's London branch. He provides lectures during webinars and seminars for traders on topics such as; Psychology of market participants’ moods, Investments & speculation with different financial instruments and Automated Expert Advisors & signal providers. Zahari’s success lies in his application of research-backed techniques and practices that have helped him become a successful forex trader, a mentor to many traders, and a respected authority figure within the trading community.