The EUR/USD currency pair flashed red and erased some previous session gains but still trading above the 1.1100 level. The reason for the fresh declines in the pair could be attributed to the board-based U.S. dollar strength as well as the contraction in the Eurozone, and the German manufacturing sector also exerted some downside pressure on the shared currency and contributed to the currency pair's decline. At this moment, the EUR/USD currency pair is currently trading at 1.1127 and consolidating in the range between 1.1119 and 1.1139.
At the USD front, the broad-based U.S. dollar reported gains on the day as investors turned into the safe-haven assets due to the latest conflict between the U.S. and China triggered by China's decision to stop purchasing U.S. soybeans and other agricultural goods. The reason for the stronger U.S. dollar could also be attributed to the second wave of coronavirus. Moreover, the gains were further bolstered by the intensifying protest in dozens of U.S. cities over the death of George Floyd, which exerted some bullish impact on the safe-haven U.S. dollar and kept the EUR/USD currency pair lower.
Apart from this, the currency pair's declines were further bolstered by the contraction in the Eurozone and German manufacturing sector, which undermined the single currency and kept the currency pair under pressure. Moreover, the US ISM Manufacturing PMI also showed a bigger-than-expected contraction, with 43.1 in May. The dismal economic data from both regions kept the currency pair in the confined range above 1.1100.
At the coronavirus front, the number of reported coronavirus cases increased to 182,028, with a total of 8,522 deaths so far. Daily, the cases raised by 213 in Germany on the day against Monday's +333 while the death figures increased by 11 as per the German disease and epidemic control center, Robert Koch Institute (RKI).
Looking forward, the market calendar is empty today due to the absence of significant Eurozone/U.S. macro news so that the traders will keep their eyes on the risk sentiment and USD flows. The shared currency buyers will struggle to break above the 1.1150 rejection, in the wake of the optimism about the European Union (E.U.) coronavirus recovery fund and more ECB bond-buying as well.
Daily Support and Resistance
- S1 1.1022
- S2 1.1075
- S3 1.1104
Pivot Point 1.1129
- R1 1.1157
- R2 1.1182
- R3 1.1236
From the technical viewpoint, the EUR/USD pair is trading with a bullish bias around 1.1168 level after having violated the 1.1145 resistance level. Now it's likely to work as a support for the EUR/USD pair. On the 4 hour chart, the pair has formed a bullish engulfing pattern, and that pattern is pretty much likely to drive more buying in the EUR/USD pair and can lead it towards the next target level of 1.1235 level. Let's look for buying over 1.1130 level today. Good luck!