Forex Technical Outlook For EUR/USD (Daily)
Worldwide turmoil increased as more signs of global economic slowdown hit the wires this Tuesday, in the form of Markit Manufacturing PMIs.
China, the official manufacturing PMI survey declined by 0.4 point to 49.0 in February reaching its lowest mark since November 2011, while the EU reading fell to a 12 month low in February of 51.2 against previous 52.3, while in Japan, it declined to 50.1 from the previous 50.2.
European data was no better; the EU reading fell to a 12 month low in February of 51.2 against previous 52.3.
The rest of the major European economies, with the exception of Germany, printed readings below expectations, and neared the 50.0 mark.
The only positive news came from Germany, as unemployment in the country decrease by 10,000 in February, leaving the unemployment rate unchanged at 6.2%.
In the US, the ISM manufacturing index rose to 49.5 from 47.8 in January, still in contraction territory, while construction spending rose 1.5% in January, with increases in private and public spending.
The EUR/USD did not attract investors, slowly sliding towards its daily low, weighed by speculations the ECB may take some aggressive easing measures in its March meeting.
Technically, the 4 hours shows that the price bounced some from the low, while the Momentum indicator heads North within Bearish territory, recovering from oversold readings.
The fact that price did not follow the technical indicator suggests that Bears are still in control. In the same chart, the RSI indicator consolidates near oversold readings, and the 20-Day MA maintains a sharp Bearish slope above the current mark, all of which supports a test of the Key 1.0800/10 region, where buyers have been defending the Southside since last December.
Should the single currency trigger the large stops suspected below this region, the decline should extend South to the 1.0700 region.
Support marks:1.0810 1.0770 1.0730
Resistance marks: 1.0890 1.0925 1.0960
Technical analysis is a method of forecasting price movements by looking at purely market-generated data. Price data from a particular market is most commonly the type of information analyzed by a tech trader.