FXStreet (Mumbai) – The EUR/USD pair came under renewed selling pressure and now drops to lows near 1.0830 as the persisting risk-on trades heightened after the Japanese stocks rallied nearly 6% and hence, led rest of Asia higher on expectations of additional BOJ stimulus.
While, from a wider perspective, the euro remains pressured across the board after ECB Chief Draghi’s said on Thursday that the central would reconsider policy measures in March, with markets now speculating further ECB stimulus in wake of the recent global market turmoil.
Attention now shifts to the French and German flash manufacturing and services PMIs due later in the European session for fresh incentives on the major.
New German business orders to suggest a strong start to 2016?
The German flash PMIs will be more closely eyed as Germany remains the economic power house of the 19-nations bloc. The headline flash manufacturing PMI for Germany is expected to register a slightly lower 53.0 result compared to the final 53.2 figure recorded in December, while the index for the services sector is also projected to show a downtick to 55.5 from 56.0 recorded in Dec.
The final PMI report for Germany released at the start of this month showed that the German manufacturing sector activity improved to the strongest levels in four months. The improvement was mainly in response to the new export orders having risen at the sharpest rate in nearly two years.
Hence, for today, it remains to be seen if the new export orders continue to drive the overall sectors’ performance, especially in wake of the recent oil price falls.
While France’s flash manufacturing PMI may tick slightly higher to 51.5 in January from 51.4 measured the month before, while the services sector is expected to start recovering to 50.3 from the final drop to 49.8 recorded in December.
EUR/USD Technical Levels
At 1.0835, the pair finds the immediate resistance is seen at 1.0900 (round number/ daily high). A break beyond the last, doors will open for a test of 1.0942/50 (100-DMA/ psychological levels). On the flip side, the immediate support is placed at 1.0803 (Jan 13 Low), below which 1.0782/77 (daily S1/ Jan 21 Low) could be tested.
(Market News Provided by FXstreet)