EUR/USD Forecast: Another timid recovery, bearish pressure persists

EUR/USD Forecast: Another timid recovery, bearish pressure persists

EUR/USD short-term technical outlook

  •  06/09/2023 19:57:52 GMT
  • The US Dollar gains an advantage during risk-averse sentiments, particularly when accompanied by positive ISM Service PMI data.
  • The EUR/USD hits new monthly lows but maintains its position above the 1.0700 level.
  • While the primary trend continues to be bearish, there is potential for the Euro to stage a recovery if it manages to stay above the 1.0700 level.

The EUR/USD marked a fresh three-month low but maintained its position above the 1.0700 threshold. Robust US economic data and risk aversion sentiments are bolstering the overall strength of the US Dollar.

Recent data from the Eurozone presents concerning figures, including an 11.7% drop in German Factory Orders in July and a 0.2% decrease in Eurozone Retail Sales for the same month. These statistics raise uncertainties regarding the European Central Bank’s (ECB) upcoming Governing Council meeting next week.

Despite these challenging numbers, the Euro managed to outperform both the Pound and the Swiss Franc. Upcoming on Thursday, Eurostat will release revised Q2 employment and GDP data, with limited expected impact due to their revision nature.

In the United States, the ISM Manufacturing PMI surpassed expectations, providing a boost to the US Dollar. Following the release of this data, the EUR/USD hit a low point of 1.0702, but subsequently recovered some ground, reaching 1.0730. The continued solid economic performance in the US remains a significant driver of the Dollar’s strength, further supported by prevailing risk aversion sentiment. Looking ahead, Thursday will bring key data releases in the form of Jobless Claims and Unit Labor Cost figures in the US.

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