The EUR/USD pair was closed at 1.16598 after placing a high of 1.17187 and a low of 1.16511. Overall the movement of the EUR/USD pair remained bearish throughout the day. On Wednesday, the pair EUR/USD extended its losses and dropped for 4th consecutive session on the back of broad-based US dollar strength and resurgence of coronavirus cases in Europe.
On the data front, the German GfK Consumer Climate in September came in as -1.6against the forecasted -1.0 and previous -1.7 and weighed on the local currency that added further pressure on EUR/USD pair prices.
At 12:15 GMT, the French Flash Services PMI dropped to 47.5 in September from the forecasted 52.2 and weighed on Euro. Simultaneously, the French Flash Manufacturing PMI in September remained flat with the expectations of 50.9.
At 12:30 GMT, the German Flash Manufacturing PMI rose to 55.6 in September from the anticipated 52.0 and supported Euro. The German Flash Services PMI dropped to 49.1 from the expected 53.0 and weighed on Euro that added further pressure on EUR/USD pair. At 13:00 GMT, the Flash Manufacturing PMI rose to 53.7 from the forecasted 51.5 and supported single currency Euro. Simultaneously, the Flash Services PMI from the Eurozone declined to 47.6 against the anticipated 51.0 and weighed on Euro.
The Services sector in France, Germany, and the whole bloc was contracted during September due to an increased number of restrictive measures amid the coronavirus spread. The rising number of coronavirus in Europe has forced many countries to re-introduce restrictive measures like closing bars, restaurants, parks, and public gatherings. This has weighed heavily, not on the economic indicators but also the local currency that ultimately dragged the EUR/USD pair on Wednesday.
Furthermore, on the US front, the US dollar was also strong across the board that helped drag the EUR/USD prices on the downside. The US dollar has recently regained its safe-haven status and is continuously picking up pace due to rising appeal for a safe haven.
The latest comments in UN Annual General Assembly from US President Donald Trump against China raised global tensions on Wednesday. Trump blamed China and called the UN to hold China accountable for the worldwide spread of coronavirus. In contrast, Beijing called Trump a liar and said that he should respect the UN forum.
The rising tensions between the US & China gave a boost to US dollar prices and helped the EUR/USD pair to drop further. The US dollar was also strong because of the positive US economic data on the day as HPI in July rose to 1.0% from 0.4% of expectations, and the Flash Manufacturing PMI expanded with 53.5 points against the forecasted 52.5. The US Dollar Index also rose to its 8-weeks highest level at about 94.21 and posted gains. The strong US dollar added downside pressure on EUR/USD pair’s prices.
Daily Technical Levels
Pivot point: 1.1724
The selling bias of the EUR/USD proceeds to control the market as it’s implementing selling bias at 1.1650. The bearish breakout of the 1.1650 level can stretch the downward trend unto the 1.1590 level while resistance lingers at the 1.1670 level. Checkout a trading plan below…
Entry Price – Sell 1.16521
Stop Loss – 1.16921
Take Profit – 1.16121
Risk to Reward – 1:1
Profit & Loss Per Standard Lot = -$400/ +$400
Profit & Loss Per Micro Lot = -$40/ +$40
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