EUR/USD: Bullish ahead of PMI data

Later in the day, PMI data from France, Germany and the Euro-Zone will be released, which can cause volatility in the EUR/USD pair. The following are the expected forecasts VS the previous data:

France PMI - Flash Estimates -PMI Markit- Manufacturing: 48 vs previous 47.9

Germany PMI - Flash Estimates -PMI Markit- Manufacturing: 53.5 vs previous 54.4

Euro-Zone PMI - Flash Estimates -PMI Markit- Composite: 52.5 vs previous 52.8

Euro-Zone PMI- Flash Estimates -PMI Markit- Manufacturing: 52 vs previous 52.6

Euro-Zone PMI - Flash Estimates -PMI Markit- Services: 52.3 vs previous 52.4

Ahead of these data, EUR/USD is relatively bullish. However, apart from France PMI forecasted data, other data are expected to be lower than the previous month. This can post as a bearish sentiment for EUR/USD.

Technical Insights:

Short term (15min) chart of EUR/USD:

Trend Analysis: Bullish (50 SMA above 200 SMA).

Levels Analysis: Critical support zone at 1.10180 - 1.10240 and resistance at 1.10600.

Takeaway: With a bullish indication by both moving averages and a formation of a double bottom chart pattern, the price should continue to ascend technically to the resistances posted by the downtrend line and the 10.10600 level. A positive outlook of the PMI data can also drive the price up. On the other hand, if data is worst than expected, we may see the support zone of 1.10180 - 1.10240 being taken out and descend to the 1.09800 level, supported by the double bottom formation. Since this is a lower time frame fundamental news can cause huge swings in the currency, which is a key thing to note.



Long term (Daily) chart of EUR/USD:

Trend Analysis: Bullish (50 SMA above 200 SMA).

Levels Analysis: Critical support at 1.09130 and resistance at 1.11790

Takeaway: Although bullish in a long-term perspective with the 50 SMA above 200 SMA, both moving averages are turning downwards, which may lead to a formation of the death cross. Price action is also bearish with the 6 months uptrend line broken. According to the measure rule for price projection of trendline mirror, I expect price to continue its descent down to the 1.06280 level.