EUR/USD Softly Higher, But Technical Pressures Persist Heading Into Lopsided Wednesday

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  • EUR/USD continues to recover from a near-term low around 1.0667.
  • Euro sees mid-tier data docket until Friday’s PMI prints.
  • US markets heading into a midweek holiday, market flows to be throttled.

EUR/USD is drifting slowly higher in tepid market conditions heading into a quiet Wednesday that sees low-impact EU data and darkened US markets for a midweek holiday shutdown. Broad-market sentiment continues to grind its way upwards as investors shrug off overly cautious talking points from a slew of Federal Reserve (Fed) officials.

Wednesday’s economic calendar is muted regarding the Fiber, with US markets darkened for the Juneteenth midweek holiday and only mid-tier releases on offer for the Euro. the European Central Bank’s (ECB) latest Economic Bulletin will be released, and German Producer Price Index (PPI) figures are expected to recover. MoM German PPI is forecast to tick up to 0.3% from the previous 0.2%, and annualized German PPI is expected to rebound to -2.0% YoY from -3.3%.

EUR/USD traders will be hunkering down for the wait to Friday’s Purchasing Managers Index (PMI) print, where the trading week will wrap up with an update on economic activity expectations for June. The Pan-European HCOB manufacturing PMI is expected to climb to 47.9 MoM from 47.3, with the Services component forecast to tick up to 53.5 from 53.2. On the US side, both the Manufacturing and Services components are expected to decline. The Manufacturing component is forecasted to decrease to 51.0 from 51.3, and the Services PMI is expected to drop to 53.3 from 54.8.

EUR/USD technical outlook

EUR/USD is struggling under the weight of technical pressure from the 200-hour Exponential Moving Average (EMA) at 1.0767. Bids have struggled to recover above 1.0750 despite pushing up from near-term lows around 1.0670. 

Daily candlesticks are poised for a bullish extension to the 200-day EMA near the 1.0800 handle, but descending technical resistance from late December’s peaks near 1.1140 are weighing on bullish momentum, and a downside reversal could drag the Fiber into fresh lows for 2024 below 1.0600.

EUR/USD hourly chart

EUR/USD daily chart

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