EUR/USD meets solid contention in the boundaries of 1.18

EUR/USD appears to have met initial and fairly solid contention in the 1.1800 neighbourhood so far this week, while the subsequent rebound remained so far unable to reclaim the 1.19 barrier and beyond. The pair remains unable to regain some serious traction on Friday following flash PMIs in core Euroland which came in mixed for the month of August, FXStreet’s Pablo Piovano reports.

Key quotes

“Flash PMIs in the core euro region showed mixed results, adding to the view that a ‘V-shaped’ recovery could be running out of steam. These figures add to Thursday’s disappointing results from the US labour market report, where Initial Claims rebounded during last week and the Philly Fed index surprised to the downside.”

“The technical view of the ongoing correction follows recent overbought levels and is reinforced by the bearish divergence in the daily RSI (the indicator never confirmed the yearly high). That said, the 1.1700/1.1690 band is expected to offer solid contention in case sellers regain some (temporary) control. On another direction, any rebound should surpass recent tops to allow for a more serious move to the psychological 1.20 neighbourhood.”