The latest PMI figures were just released, and unfortunately, they were not as positive as analysts had hoped. Both the Flash Manufacturing PMI and Flash Services PMI for Germany and France fell below the 50.0 threshold, indicating a slowdown in Europe’s economy.
This news has had a negative impact on the euro, causing it to weaken even further. The EUR/USD chart has been on a downward trend since early October, with key levels being breached:
– Support near the 1.0800 level was broken earlier, which was drawn through the spring-summer lows.
– Today, the pair dropped below the key psychological level of 1.0500 and even below the 2023 low.
Currently, bears seem to be in control as EUR/USD trades near the lower boundary of the downward channel. Both the channel median and the 1.0500 level are acting as resistance, as indicated by arrows on the chart.
However, there might be some hope for bulls as well. Today’s candle shows a long lower shadow, which could indicate emerging demand that may provide support for the struggling euro.
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Overall, the current situation with the EUR/USD pair is concerning, and traders should proceed with caution in these volatile market conditions.
