EURO FUNDAMENTAL BACKDROP
German PMI’s laid the pathway for eurozone data (see economic calendar below) which beat estimates on both services and manufacturing prints. Although the region remains in contractionary territory, the rate of decline was slower than predicted due to softer inflationary forces impacting input prices with regards to the manufacturing sector leading to moderated selling prices.
EUR/USD ECONOMIC CALENDAR
Unfortunately for the euro, the data beat was not enough to deter the bearish sentiment around the euro including recessionary risks as well as the inability by ECB hawks to support a 75bps interest rate hike in the next meeting. The day ahead should provide more volatility for EUR/USD with U.S. data taking center stage.
EUR/USD DAILY CHART
EUR/USD price action responded negatively to the aforementioned PMI data and currently resembles a long upper wick on the daily candle which could point to subsequent weakness should the candle close in this fashion.