The EUR/USD currency pair has fallen to its lowest level in over a year, trading below the critical 1.0500 level. The drop came amid renewed bearish sentiment, particularly during the American trading session on Thursday. As traders and analysts look ahead to key data releases, the pair struggles to maintain stability.
The decline of the EUR/USD is being driven by a stronger US Dollar, bolstered by positive economic data from the United States and comments from officials at the Federal Reserve. In particular, their remarks highlighted expectations for future interest rates, suggesting that cuts may be more gradual as the Fed approaches a stable rate environment. This sentiment has intensified selling pressure on the EURO , pushing the currency pair further downward.
Attention now turns to upcoming releases of the Purchasing Managers Index (PMI) data for Germany, the Eurozone, and the United States. The preliminary results for November’s HCOB Manufacturing and Services PMI will be particularly scrutinized. If the Services PMI in either Germany or the broader Eurozone dips below the critical threshold of 50, indicating a contraction, it could trigger further declines in the EURO against its major counterparts.
Later in the day, the S&P Global Manufacturing and Services PMI for the US will also be pivotal. Should the Manufacturing PMI rebound above 50 and the Services PMI remain steady near previous levels, the US Dollar could maintain its strength, putting additional pressure on EUR/USD as the weekend approaches.
From a technical perspective, the EUR/USD pair is situated within a downtrend, with the Relative Strength Index (RSI) suggesting potential oversold conditions. Immediate resistance is found at the 1.0500 level, with further resistance at 1.0540 and 1.0570. On the downside, support levels are positioned at 1.0400 and 1.0360, which could play crucial roles in dictating price movements in the coming days.
