Euro remained broadly stable against other major currencies following the release of preliminary September Purchasing Managers’ Index data from Hamburg Commercial Bank in Germany.
PMI data showed that manufacturing output slowed, although services activity returned to expansion territory. Manufacturing PMI came in at 53.8, below expectations of 54.5 and the previous reading of 54.3. Services PMI rose sharply to 52.9 from 49.7 in August. A reading above 50.0 indicates an expansion in business activity.
Strong services activity supported a clear improvement in overall business conditions, with Composite PMI rising to 53.8 from 51.8 in August.
Against US dollar, euro fell 0.24% to trade near 1.1420. EUR/USD remained under pressure as US dollar stayed broadly firm amid widespread expectations that Federal Reserve could raise interest rates at least once more before the end of the year.
At the time of writing, US Dollar Index, which measures performance of US currency against six major currencies, was up 0.23% near 100.77, reaching its highest level in more than seven weeks.
Federal Reserve policymakers continue to warn about persistent inflation risks amid energy shocks and strong demand, reinforcing expectations that further interest rate increases may still be required.
From a technical perspective, EUR/USD traded around 1.1422 on the daily chart and maintained a near term bearish bias as price remained below the 20 period exponential moving average at 1.1532. Pair continued to retreat from previous highs, while latest Relative Strength Index reading near 29 pointed to emerging oversold conditions. This suggests that downside momentum could continue even as selling pressure becomes increasingly stretched.
On the upside, initial resistance stands at the 20 period exponential moving average near 1.1532, which continues to limit recovery attempts and represents the first major obstacle for any corrective rebound. As long as price remains below this moving average, upward moves are likely to be viewed as corrective within a broader bearish phase. A sustained move above this level would be needed to ease immediate downside pressure and open the way for a more durable recovery.
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