- EUR/USD stabilized at around 1.0650 in the European session.
- PMI data from the EU and Germany revealed a recovery in the private sector's business activity.
- An improving risk mood could help the pair recover ahead of the weekend.
EUR/USD closed the day virtually unchanged below 1.0700 on Thursday and went into a consolidation phase at around 1.0650 early Friday.
The data from Germany and the Euro area showed that the business activity in the private sector contracted at a softer pace in early August than in July. HCOB Composite PMI rose to 46.2 and 47.1 in Germany and the Euro area, respectively. These readings failed to provide a noticeable boost to the Euro but helped it hold its ground.
Commenting on the PMI survey's findings, "companies still show some resilience and optimism in the face of lower demand," said Dr. Cyrus de la Rubia, Chief Economist at Hamburg Commercial Bank (HCOB). "We expect the Eurozone to enter a contraction in the third quarter. Our nowcast, which incorporates the PMI indices, points to a drop of 0.4% compared to the second quarter."
Euro price this week
The table below shows the percentage change of Euro (EUR) against listed major currencies this week. Euro was the weakest against the New Zealand Dollar.
| USD | EUR | GBP | CAD | AUD | JPY | NZD | CHF |
| USD |
| 0.22% | 1.15% | -0.38% | 0.12% | 0.34% | -0.81% | 0.96% |
| EUR | -0.23% |
| 0.92% | -0.61% | -0.09% | 0.11% | -1.03% | 0.74% |
| GBP | -1.17% | -0.94% |
| -1.56% | -1.05% | -0.84% | -1.98% | -0.21% |
| CAD | 0.39% | 0.59% | 1.52% |
| 0.48% | 0.71% | -0.42% | 1.34% |
| AUD | -0.11% | 0.11% | 1.04% | -0.48% |
| 0.21% | -0.92% | 0.85% |
| JPY | -0.34% | -0.11% | 0.84% | -0.69% | -0.22% |
| -1.13% | 0.63% |
| NZD | 0.79% | 1.02% | 1.95% | 0.42% | 0.92% | 1.12% |
| 1.78% |
| CHF | -0.98% | -0.74% | 0.20% | -1.35% | -0.85% | -0.63% | -1.79% |
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The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent EUR (base)/JPY (quote).
S&P Global will release Manufacturing and Services PMI data for the US. In case the Services PMI comes in below 50 unexpectedly, the USD could have a difficult time finding demand ahead of the weekend.
Investors will also keep a close eye on risk perception. Following a sharp two-day decline, Wall Street's main indexes look to open in positive territory on Friday, with US stock index futures rising between 0.1% and 0.3%. In case risk flows dominate the action in the financial markets in the American session, EUR/USD could stretch higher.
EUR/USD Technical Analysis
EUR/USD trades within the descending regression channel and the Relative Strength Index (RSI) indicator on the 4-hour chart stays below 50, reflecting the bearish bias in the near term. 1.0670 (20-period Simple Moving Average (SMA), upper limit of the descending channel) aligns as first resistance before 1.0690-1.0700 (50-period SMA, psychological level). A 4-hour close above the latter could attract technical buyers and open the door to an extended rebound toward 1.0720 (100-period SMA) and 1.0760 (static level).
On the downside, 1.0630 (static level, mid-point of the descending channel) aligns as immediate support before 1.0600 (psychological level) and 1.0580 (lower limit of the descending channel).