EURUSD recovered marginally in Monday’s European session.
EURUSD traded strongly bearish in the second part of the previous week, closing in negative territory for three days in a row. After losing more than 1% weekly, the pair staged a technical correction and traded above 1.1050 in the European morning on Monday.
US financial markets will be close on Labor Day.
The US Dollar (USD) remained strong ahead of the weekend as markets paid little attention to July’s Personal Consumption Expenditures (PCE) Price Index numbers.
The United States Bureau of Economic Analysis reported that annual PCE inflation remained stable at 2.5%. Meanwhile, the core PCE Price Index, which excludes volatile food and energy costs, increased 0.2% monthly, as expected.
The US bond and stock markets will be close on Monday to observe the Labor Day holiday. As a result, trade activity expected to slow in the latter portion of the day.
On Tuesday, ISM Manufacturing PMI for August will be release. Later in the week, investors will be able to examine further data release from the United States, including the ISM Services PMI and the August jobs report.
EURUSD Technical Analysis
EURUSD start to move higher after approaching 1.1040, where the Fibonacci 38.2% A retracement of the most recent upswing has been identified. At the time of publication, the pair was trading a few ticks above the four-hour chart’s 100-period Simple Moving Average (SMA), which is currently at 1.1060. If the pair confirms this level as support, 1.1100 (Fibonacci 23.6% retracement, static level) may be the next level of resistance before 1.1130 (50-period SMA).
On the downside, a dip below 1.1060 (100-period SMA) might set the stage for another test of 1.1040. When such support fails, technical sellers may become interested. In this case, 1.1000 (psychological level, Fibonacci 50% retracement) could be consider the next negative target.
