EUR/USD: Services sector activity across the Euro-zone slowed less than initially estimated in June


EURUSD Movement

For the 24 hours to 23:00 GMT, the EUR marginally declined against the USD and closed at 1.1351.

On the data front, the Euro-zone’s final Markit services PMI fell less than initially estimated to a level of 55.4 in June, compared to a drop of 54.7 registered in the preliminary print. In the prior month, the PMI had recorded a level of 56.3. On the other hand, the region’s seasonally adjusted retail sales grew more-than-expected by 0.4% on a monthly basis in May, compared to a rise of 0.1% in the prior month.

Separately, growth in Germany’s services sector cooled less than initially estimated to a level of 54.0 in June, but remained at a five-month low level, while the flash estimate had indicated a fall to a level 53.7. In the previous month, the PMI had recorded a reading of 55.4.

The greenback traded mixed against a basket of major currencies, after minutes from the Federal Reserve’s (Fed) June meeting showed that committee members are still divided over the outlook for US inflation and when to start reducing the balance sheet.

According to minutes, policymakers were not able to agree upon how soon to start winding down their $4.5 trillion balance sheet as some wanted to announce a start to the process by the end of August but others wanted to wait until later in the year. Further, a few members expressed concerns over subdued inflation but most officials voiced confidence that inflation will recover after recent soft readings.

On the economic front, the final durable goods orders eased 0.8% in May, revised from preliminary figures that had recorded a fall of 1.1%. Durable goods orders had recorded a revised drop of 0.9% in the prior month. Moreover, the nation’s factory orders declined more-than-anticipated by 0.8% in May, compared to market consensus for a fall of 0.5%. In the previous month, factory orders had fallen 0.3%.

In the Asian session, at GMT0300, the pair is trading at 1.1338, with the EUR trading 0.11% lower against the USD from yesterday’s close.

The pair is expected to find support at 1.1311, and a fall through could take it to the next support level of 1.1284. The pair is expected to find its first resistance at 1.1367, and a rise through could take it to the next resistance level of 1.1396.

Moving ahead, market participants will anxiously await the release of the European Central Bank’s recent meeting minutes, slated in a few hours, to get cues on whether the bank is closer to begin scaling back its monetary stimulus. Additionally, the US ADP employment report, ISM non-manufacturing PMI and the initial jobless claims data, slated to release later in the day, will keep investors on their toes.

The currency pair is showing convergence with its 20 Hr moving average and trading below its 50 Hr moving average.

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