Preliminary estimates of PMIs, not only in Europe but also in the United States, turned out to be much worse than forecasts. This is especially evident in the United States' Manufacturing PMI, which instead of rising from 48.4 points to 48.7 points, declined to 46.3 points. So it's not surprising that initially the euro declined and then rose. However, it was unable to fully recover its morning losses, primarily due to a sharper decline in European indices. The composite eurozone business activity index dropped from 52.8 points to 50.3 points, while in the United States, it went from 54.3 points to 53.0 points.
Today, we have an empty economic calendar, and after a fairly active end to the previous week, the market is likely to enter a sideways phase.
The EUR/USD pair, after bouncing off the psychological level of 1.1000, moved downwards. This resulted in significant price changes, ultimately causing the local quote to fall below the 1.0850 level.
From a technical standpoint, on the 1-hour and 4-hour charts, the RSI indicator shows that the euro has temporarily entered oversold territory, which resulted in a rebound.
On the 4-hour chart, the moving average lines (MA) changed direction, indicating a correction.
Outlook
The technical correction brought the quote back to the vicinity of 1.0900, making it possible for the euro to partially recover its value following the recent decline. We can assume that the single currency will temporarily consolidate around this level, allowing market forces to regroup. Regarding price movements, you can consider the bullish scenario if the price returns above the 1.0950 level. A bearish scenario if the price stays below the 1.0850 level.
The complex indicator analysis unveiled that in the short-term period, technical indicators suggest a recovery in the euro's value. In the intraday period, there is a residual signal indicating a corrective movement. In the medium term, the indicators are pointing to bullish sentiment.
