EUR/USD weakened after Eurozone data, falls to 1.0480

• The euro weakened after activity data from the Eurozone.
• The dollar continues to be supported by a cautious climate in the markets.
• EUR/USD remains sideways in the very short term, in the familiar range.

EUR/USD started Thursday near 1.0600 and after trading for hours between 1.0580 and 1.0555, it broke lower and fell back to 1.0480, weakened after economic data from the Eurozone. The focus shifts to US data and Powell.

Fears grow over the pace of activity in Europe

The S&P Global PMI report for the Eurozone was below expectations in June according to the preliminary estimate. The index for the region’s service sector fell to 52.8 and the manufacturing index to 51.9, both showing a bigger pullback than the market consensus. In Germany, the manufacturing index stood at 52.0, the lowest in 23 months, and the services index at 52.4, the lowest in five months.

The PMI reports worsened expectations for future growth and weighed on markets, boosting European bonds. Yields across the board are at their lowest in more than two weeks. The German 10-year bond yield fell to 1.42%. Treasury yields are also falling at a less intense pace.

In USA Preliminary S&P Global PMI readings will also be released. Data on unemployment subsidy requests will come out first. In addition, the chairman of the Federal Reserve, Jerome Powell, will speak again before a congressional committee.

EUR/USD remains sideways

The EUR/USD pullback was still not enough to cut the current sideways with a slight bullish bias. The break of 1.0480 will put further pressure and would enable a test of the next support at the 1.0450 area; below follows 1.0400.

On the upside, the first resistance appears at 1.0525, and then 1.0550/55 will follow, where the 20-hour moving average is also passing. A return above would turn the intraday bias to bullish exposing 1.0480. Key resistance remains at 1.0600/10.

Technical levels