The EUR/USD currency pair on Thursday plunged to trade at a new 2-week low of about 1.2120 following the latest round of the US data. The currency pair continues to trade within an ascending channel formation in the 60-min chart.
The pair is now trading several levels below the 100-hour moving average. It has also dropped to the oversold levels of the 14-hour RSI. This could trigger a short-term pullback going to the tail-end of the week.
EUR/USD Fundamentals Overview
From a fundamental perspective, the EUR/USD currency pair is trading at the back of a relatively busy period in the US market. On Thursday, the US ISM Servies PMI for May beat the expectation of 63 with 64. The ISM Services Prices Paid also outshone 75.9 with 80.6 while New Orders Index beat 57.9 with 63.9. On the other hand, the Manufacturing Employment Index came short of 58 with 55.3. The Markit Services PMI came in slightly better than 70.1 with 70.4. The Markit PMI composite also beat 68.1 with 68.7.
On the other hand, the ADP Employment change for May outperformed the expected job count of 650k with 978k. Non-farm productivity for Q1failed to match the expectation of 5.5% with a change of 5.4% while Unit Labor costs soared 1.7% compared to an expected decline of 0.4%. The initial jobless claims for the week ending May 28 beat 395k with 385k.
Elsewhere, the EU Markit PMI Composite for May beat the expectation of 56.9 with 57.1. German retail sales for April missed both the (MoM) and (YoY) expectations while the Markit PMI composite was in line.
EUR/USD Technical Analysis (the 60-min Chart)
Technically, the EUR/USD currency pair appears to be trading within a gently ascending channel formation in the 60-min chart. The pair has recently plunged to the trendline support. This indicates an attempt by the bears to seize control of the pair in the short term.
The bulls will be targeting short-term rebound profits at around 1.2168 or higher at 1.2210. On the other hand, the bears will target extended declines at around 1.2091 or lower at 1.2055.
EUR/USD Technical Analysis (the Daily Chart)
In the daily chart, the EUR/USD currency pair appears to be trading within a sharply ascending channel formation. This indicates a significant long-term bullish bias in the market sentiment. The pair has now rallied closer to overbought levels of the 14-day RSI.
The bulls will be looking to ride the current bull-run by targeting profits at around 1.2240 or higher at 1.2350. On the other hand, the bears will target pullback profits at around 1.1950 or lower at 1.1819.