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• EUR/USD fell a scant tenth of a percent on Wednesday.
• Market flows are crumpling with little of note on the data docket.
• The usual flow of trade war rhetoric headlines has abated, PMI figures loom ahead.

EUR/USD stumbled on Wednesday, giving up around one-tenth of one percent as markets grind through a lull between the week’s key data prints. US President Donald Trump has briefly halted his steady stream of trade war rhetoric and threats to impose import taxes on his own citizens across the board, leaving markets with little else to focus on.

Thursday will open up with a thin data docket just like Wednesday, and the US Federal Reserve (Fed) has entered its usual blackout period ahead of next week’s rate call. The European Central Bank (ECB) doesn’t have to worry about such self-imposed insults, but there is little that policymakers can say at this point that will shift market perspectives meaningfully in either direction. ECB President Christine Lagarde made an appearance on Wednesday that went largely unnoticed.

Fiber traders will have to settle for focusing on Friday’s Purchasing Managers Index (PMI) figures due from both the EU and the US. Both EU and US PMI business activity survey results for January are expected to come in mixed this week. The services components expected to tick down, or in the EU’s case, hold flat, and manufacturing to recover, albeit slightly. PMI figures generally have a limited impact unless figures come in wildly out of sync with forecasts, but survey respondent rates tend to be on the low side, and the overall figures should be taken with a grain of salt.

EUR/USD price forecast
 

Fiber bulls ran out of gas just south of the 50-day Exponential Moving Average (EMA) near 1.0460, flubbing the 1.0450 level and sending bids back down into the 1.0400 handle. Near-term bullish momentum has steadily fizzled despite dragging price action back up 2.75% bottom-to-top from last week’s dip into fresh two-year lows below 1.0200.

Despite technical indicators rolling over into bullish signals after giving firm indications of prices hitting oversold territory, sustained momentum is proving elusive. Traders hoping for a longer-term bullish correction should wait for price action to confirm a higher low pattern before looking for technical signals to jump in.

EUR/USD daily chart
 

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