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Bearish view
The EUR/USD pair continued its recovery, reaching its highest level since June 17 after the strong Eurozone services and composite PMI and as crude oil prices remained under pressure amid optimism on the Strait of Hormuz. It rose to 1.1554, up by nearly 2% from its lowest level last month.
Strong Macro Data and US-Iran War Progress
The EUR/USD pair continued rising on Thursday after the latest Eurozone and US services PMI numbers. A report by S&P Global showed that the Eurozone PMI jumped from 49.4 in June to 51.7 in July, higher than the median estimate of 51.6. The composite PMI, which combines the manufacturing and services sectors, rose from 50 to 52.
The same trend happened in the United States. A report by S&P Global showed that the services and composite PMIs jumped to 54.6 and 54.5, respectively. Another one by ISM revealed that the PMI jumped to 54.1. These numbers mean that the two economies are doing relatively well, despite the ongoing crisis in the Middle East.
Meanwhile, a separate report by ADP showed that the private nonfarm payrolls slipped to 44k jobs in July from 95k a month earlier. The report was much lower than the average estimate of 68k. As a result, focus now shifts to the official report by the Bureau of Labor Statistics (BLS), which will come out on Friday. Economists expect the data to show that the economy created over 57k jobs in July after adding 80k in the previous month.
Traders are also focusing on the ongoing crisis in the Middle East, where the US and Iran have halted their attacks. There are also signs that the Strait of Hormuz will be reopened if the Iran and Oman deal works out.
EUR/USD Technical Analysis
The daily chart reveals that the EUR/USD pair has rebounded in the past few days. It has moved from a low of 1.1325 in June to the current 1.1555.
The pair has remained above the key support level of 1.1487, the neckline of the double-bottom pattern. It has now moved above this neckline and retested it, confirming the bullish outlook.
Also, the pair jumped above the 50-day Exponential Moving Average (EMA), a sign that bulls are in control. Therefore, the pair will likely continue rising as bulls target the key resistance level of 1.1620, its highest point on June 15.
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Crispus Nyaga is a Technical Analyst at DailyForex with more than eight years of experience as a financial analyst, coach, and trader. He specializes in technical analysis of major currency pairs and cryptocurrencies, using chart patterns, trend structure, and key indicators to frame trading scenarios for Forex and digital asset markets. Crispus has worked with well-known brokers including ATFX, easyMarkets, and OctaFX, and his market commentary has been published widely on platforms such as Seeking Alpha, InvestingCube, Capital.com, and Invezz.
As seen on: SeekingAlpha, Macrostreet.com, Invezz.com, Forbes, Investing.com, Marketwatch, Crypto.news
