Recently, EUR/USD has broken above the highest resistance in 2.5 years at 1.1500. In light of the recent downbeat economic reports from the US and hawkish sentiment on the Euro amid ECB reports and speeches, the currency pair is set to continue to its bullish moves further. Today a series of economic reports were published in the eurozone with the mostly gloomy results. Today, French Flash Manufacturing PMI was published with an increased figure at 55.4 from previous figure at 54.8 which was expected to decrease to 54.6, French Flash Services PMI showed decrease to 55.9 from previous figure at 56.9 which was expected to be at 56.6, German Flash Manufacturing PMI report showed a decrease to 58.3 from previous value of 59.6 which was expected to be at 59.1, German Flash Services PMI report also showed a decrease to 53.5 from the previous value of 54.0 which was expected to increase to 54.4. Along with these reports, Euro Flash Manufacturing PMI report was also published with a decreased figure at 56.8 from previous figure at 57.4 which was expected to be at 57.3, Euro Flash Services PMI report was published with an unchanged figure at 55.4 which was expected to have a slight increase to 55.5 and German Buba Monthly Report is also going to be published today which is expected to be hawkish in nature. On the USD side, today we have Flash Manufacturing PMI report which is expected to increase to 52.3 from the previous value of 52.0, Flash Services PMI is expected to increase to 54.3 from the previous value of 54.2, and Existing Home Sales report is expected show a decrease to 5.59M from the previous value of 5.62M. To sum up, EUR is currently quite stronger than USD and its strength is expected to continue further but a series of downbeat reports from the eurozone is likely to cap the growth in the short term. So we might observe USD gaining some momentum to retrace to a certain extent before EUR takes off with the further bullish pressure with a much higher price destination.
Now let us look at the technical chart. The price is currently showing some bullish rejection in light of the weak economic reportsfrom the eurozone. Currently we are expecting a short-term bearish move to retrace towards 115.00 support level before progressing further upward towards 1.2050 resistance level. As the price remains above the dynamic level of 20 EMA, the bullish bias is expected to continue further in this pair.
