EURUSD:
EUR/USD declines to 1.0480 during the Asian session on Monday as the US Dollar Index (DXY), which measures the value of the US dollar against six major currencies, recovers from Friday’s one-month low of 107.22. At the time of writing, the DXY is trading near 107.60.
The US dollar is strengthening after mixed US purchasing managers’ index (PMI) data. Uncertainty surrounding the impact of US President Donald Trump’s trade and immigration policies may support a cautious approach by the US Federal Reserve (Fed) to cut interest rates this year.
Data released by S&P Global on Friday showed that the US composite PMI fell to 52.4 in January from 55.4 in December. Meanwhile, the PMI for manufacturing improved to 50.1 in January from 49.4 previously, beating estimates of 49.6. Services PMI fell to 52.8 in January from 56.8 in December, below the market consensus forecast of 56.5.
However, EUR/USD strengthened as the euro received support from the preliminary composite Eurozone HCOB Purchasing Managers’ Index (PMI), which rose in January after contracting in the previous two months. S&P Global’s flash HCOB PMI report showed that overall business activity rose. The composite PMI rose to 50.2 from 49.6 in November. Economists had expected the PMI to continue to decline, but at a slower pace to 49.7.
Trading recommendation: Watch the level of 1.0450, if the level is fixed below consider Sell positions, if the level bounces back consider Buy positions.
Origin: FreshForex
