The preliminary European PMIs published this morning had a negative impact on the euro. Although some of the data presented were better than forecasts, overall, they indicated a continued economic slowdown in the Eurozone.
In response to the data, the euro sharply declined, including against the dollar, even though the EUR/USD pair reached a local high on September 21 at the 1.0694 level.
As of writing, EUR/USD is testing a critical short-term support level at 1.0628. Its breakdown will pave the way for further decline within the bearish trend, targeting the medium-term level below the key resistance level of 1.0745 (200 EMA, 144 EMA on the daily chart) and the long-term level below the key resistance level of 1.1020 (200 EMA on the weekly chart).
In this case, the nearest downside target will be the important short-term support level at 1.0586 (200 EMA on the 1-hour chart), and a breakdown will confirm this assumption.
In an alternative scenario, a rebound will occur from the support level at 1.0628, and after a re-break of the important resistance level at 1.0670 (50 EMA on the daily chart), the price will resume its upward movement.
In this case, the corrective rise of the pair may continue towards the key resistance level at 1.0745, taking EUR/USD into the realm of the medium-term bull market. In turn, a breakout of the key resistance level at 1.1020 will return the pair to the long-term bull market.
Support levels: 1.0628, 1.0600, 1.0586, 1.0560, 1.0530, 1.0500, 1.0448, 1.0400
Resistance levels: 1.0670, 1.0695, 1.0700, 1.0745, 1.0800, 1.0820, 1.0900, 1.0920, 1.1000, 1.1020, 1.1090, 1.1200, 1.1275, 1.1300, 1.1400, 1.1500, 1.1600
