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FOREX: Broad EUR Weakness as Eurozone PMI Data Disappoints

FOREX
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  • The Euro has come under substantial pressure on Monday amid a broad set of weaker-than-expected Eurozone PMI data. Concerns regarding the growth outlook in both France and Germany, and the associated dovish ECB repricing, has weighed on the single currency with EURUSD down 0.60% as we approach the US crossover.
  • The Euro has weakened in equal proportion against the likes of AUD, NZD and CAD, however, EURJPY is a relative outlier given the ongoing sensitivity of the Japanese yen to adjustments in core fixed income markets.
  • EURUSD has slumped back below the 1.11 handle at typing, although is yet to test the post-Fed lows of 1.1069. Spot does trade back below the 20-day EMA, intersecting today at 1.1088. A close below this level is required to signal scope for a deeper retracement. Below here, a key level remains at 1.1002, the Sep 11 low.
  • For EURJPY, a bear cycle remains intact and the last week’s recovery is considered corrective. Moving average studies are in a bear-mode position and this continues to highlight a dominant downtrend. An extension lower would refocus attention on the key support at 154.42, the Aug 5 low.
  • Continued resilience for the pound sees EURGBP hit the lowest point since August 2022. The break of 0.8400 and key support at 0.8383, the Jul 17 low, are technically significant and represent a resumption of the medium-term downtrend. Initial targets for the moves are 0.8340, the Aug 2 ’22 low and 0.8311, 3.00 projection of the Aug 8 - 13 - 14 price swing.
  • US flash manufacturing and services PMI highlights the calendar later today, as markets await further comments from Fed officials. The RBA rate decision is due during APAC on Tuesday.
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  • The Euro has come under substantial pressure on Monday amid a broad set of weaker-than-expected Eurozone PMI data. Concerns regarding the growth outlook in both France and Germany, and the associated dovish ECB repricing, has weighed on the single currency with EURUSD down 0.60% as we approach the US crossover.
  • The Euro has weakened in equal proportion against the likes of AUD, NZD and CAD, however, EURJPY is a relative outlier given the ongoing sensitivity of the Japanese yen to adjustments in core fixed income markets.
  • EURUSD has slumped back below the 1.11 handle at typing, although is yet to test the post-Fed lows of 1.1069. Spot does trade back below the 20-day EMA, intersecting today at 1.1088. A close below this level is required to signal scope for a deeper retracement. Below here, a key level remains at 1.1002, the Sep 11 low.
  • For EURJPY, a bear cycle remains intact and the last week’s recovery is considered corrective. Moving average studies are in a bear-mode position and this continues to highlight a dominant downtrend. An extension lower would refocus attention on the key support at 154.42, the Aug 5 low.
  • Continued resilience for the pound sees EURGBP hit the lowest point since August 2022. The break of 0.8400 and key support at 0.8383, the Jul 17 low, are technically significant and represent a resumption of the medium-term downtrend. Initial targets for the moves are 0.8340, the Aug 2 ’22 low and 0.8311, 3.00 projection of the Aug 8 - 13 - 14 price swing.
  • US flash manufacturing and services PMI highlights the calendar later today, as markets await further comments from Fed officials. The RBA rate decision is due during APAC on Tuesday.