EURUSD edges higher on Thursday morning as oversold daily studies prompted partial profit taking.
Recovery is unlikely to be significant as the pair is in a larger downtrend, driven by negative technical and fundamentals.
Release of PMI data from EU, Germany and France showed that French business activity contracted more in October, while results from Germany were slightly better and numbers from the EU bloc fell below expectations.
According to the latest releases, manufacturing sector continues to suffer with no firm signs of significant recovery in the horizon, while services sector performs better as PMI numbers remain above 50 threshold which divides contraction from growth (Germany, EU) but overall picture shows that business activity is still contacting.
Adding to euro’s negative outlook were the latest dovish comments from ECB officials which suggest that the central bank should keep cutting interest rates until monetary policy enters the territory that stimulates economic growth.
Fresh recovery attempts probe through broken 1.0800 level and eyeing resistances at 1.0835/48 (broken Fibo 61.8% / falling 10DMA) with 200DMA (1.0869) marking solid barrier which should cap upticks.
Res: 1.0835; 1.0848; 1.0869; 1.0907.
Sup: 1.0761; 1.0745; 1.0700; 1.0666.
