VOT Research Desk
After posting significant gains on Wednesday, the EUR/USD has managed to nudge higher early Thursday. The pair’s near-term technical picture indicates overbought conditions, although bulls might maintain control if 1.0450 turns into support.
The US Dollar was heavily sold during American trading hours on Wednesday after S&P Global PMI surveys revealed that private-sector economic activity dropped considerably in early November.
Manufacturing PMI fell to 47.6 from 50.4, and Services PMI fell to 46.1 from 47.8. According to the journal, “reflecting the slower growth of input costs, firms hiked their selling prices at the weakest rate in just over two years.
The IFO’s German sentiment surveys will be included in the European economic calendar, although they are unlikely to cause a substantial market reaction.
The trading action is likely to remain subdued in the second half of the day, as the stock and bond markets in the United States will be closed in celebration of the Thanksgiving Day holiday.
As a result, investors will be watching the pair’s technical developments closely. The US Dollar was heavily sold during American trading hours on Wednesday after S&P Global PMI surveys revealed that private-sector economic activity dropped considerably in early November.
EUR/USD Technical Analysis
The four-hour chart’s Relative Strength Index (RSI) indicator surged above 70 during Wednesday’s rally, indicating overbought circumstances.
If the pair experiences a technical correction, 1.0400 (psychological level, previous resistance) is likely to act as support.
If the pair falls below that level and begins to use it as resistance, sellers may show interest, dragging it lower toward 1.0350 (50-period Simple Moving Average (SMA)) and 1.0300. (20-period SMA, psychological level). On the upside, the interim resistance level is 1.0450. (static level).
If buyers convert that level into support, further advances toward 1.0500 (psychological threshold) and 1.0530 (static level) are possible.
