EUR/USD Finds Solid Support at 1.08500 Amidst Tepid Data.

EUR/USD Finds Solid Support at 1.08500 Amidst Tepid Data, Eyes on Maintrend Continuation

In a noteworthy turn of events, the EUR/USD has staged a rebound, establishing a robust support zone at 1.08500. This critical level is reinforced by the confluence with the Dynamic trendline, acting as dynamic support, and the 61.8%-78.6% Fibonacci zone. Additionally, a Bullish Divergence in the RSI and a favorable reaction at the 200-day Moving Average signal potential upward momentum.

Euro Resilience Despite Local Data:

Interestingly, the Euro has demonstrated resilience despite tepid local data. The preliminary Producer Manager Index (PMI) survey conducted by the Hamburg Commercial Bank (HCOB) indicates that business activity in the euro area contracted at the slowest rate in January, marking a six-month low. However, the official report highlights persistent downturns in both manufacturing and service sectors, coupled with further declines in new business.

German PMI Figures:

Breaking down the data, Germany's Manufacturing PMI recorded 45.4, while the services index posted at 47.6. For the Eurozone, the Services PMI came in at 48.4, a slight decrease from the previous 48.8. On a positive note, the manufacturing index showed improvement, rising to 46.6 from 44.4 in December.

Upcoming US Preliminary PMIs:

Later in the day, S&P Global is set to release the January preliminary PMIs for the United States (US). Market expectations lean towards manufacturing output maintaining its position in expansionary territory. This event could introduce further dynamics to the EUR/USD pair, given the interconnectedness of global markets.

Technical Outlook and Maintrend Continuation:

From a technical perspective, the confluence of support factors at 1.08500, along with the positive indications from the RSI and the 200-day Moving Average, strengthens the case for a continuation of the current tendency. Traders will be closely monitoring how the pair navigates through these levels and whether the rebound can be sustained.

Conclusion:

The EUR/USD's resilience at the crucial support level of 1.08500, despite mixed local data, underscores the significance of technical factors in guiding market movements. As the pair eyes a continuation of the maintrend, upcoming US PMI data could play a pivotal role in shaping short-term market dynamics. Traders should remain vigilant and adapt their strategies in response to evolving technical and fundamental factors in the forex landscape.

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Long positions above 1.07700 with targets at 1.1000 & 1.1150 in extension.

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EUR/USD Maintains Bullish Momentum Despite PMI Contraction

The EUR/USD pair surged to 1.0930 before absorbing a retracement, currently showing resilience near the 1.085 support. This strength hints at a potential extension within a bullish channel, supported by a divergence in the RSI. Despite a contraction in business activity per Composite PMI, an unexpected rebound in Manufacturing PMI fueled Euro demand.

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