EUR/USD Rally Faces Resistance: Technical Analysis and PMI Data

FOREXN1 Updated   
OANDA:EURUSD   Euro / U.S. Dollar
EUR/USD has been on a notable uptrend, showcasing resilience and strength in the face of various market pressures. However, as the pair reaches key resistance levels and faces potential pullback scenarios, traders are closely watching upcoming PMI data releases for cues on the pair's future direction.

The recent surge in EUR/USD, which saw the pair touch its highest level since early February above 1.0850, has largely been attributed to broad-based selling pressure surrounding the US Dollar. This trend gained momentum in the second half of the week, fueled by an improving risk mood and a lack of demand for the greenback during Asian trading hours following the release of FOMC Minutes.

However, as the pair approaches the 1.0900 resistance level, technical analysis suggests a potential reversal in the price action. Supply zones and resistance levels often act as barriers to further upside momentum, prompting traders to anticipate a retracement before considering a continuation of the bullish rally.

Adding to the potential for a pullback is the release of key economic data, particularly the German Flash Manufacturing PMI, which indicated a contraction in industry expansion with a reading of 42.3. Such disappointing figures could further weigh on the Euro and prompt a correction in EUR/USD as traders adjust their positions in response to the economic outlook.

While the pair's immediate reaction to the PMI data could limit its upside, traders should remain cautious and monitor price action closely for signs of a pullback. A retracement to lower support levels could offer buying opportunities for those looking to enter or add to long positions on EUR/USD.

Trade closed: target reached:
Trade closed: target reached:


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