Daily Analysis EURUSD - 25 July 2023

The Eurozone PMIs for June disappointed as both the Manufacturing PMI and the Services PMI came in below expectations, recording figures of 42.7 and 51.1, respectively. The Composite Index also experienced a decline, reaching 48.9, marking its lowest reading since November. Germany and France were hit particularly hard, with their Composite Indexes falling below 50, which adds to concerns about potential recession risks in the region. Despite these indicators reflecting economic weakness, the European Central Bank (ECB) is likely to raise interest rates by 25 basis points on Thursday. The key to watch out for will be the messaging surrounding this decision.

In the United States, market participants adjusted their positions as they awaited the Federal Reserve's decision. The expectation is that the Fed will raise its key rate by 25 basis points on Wednesday. The central bank's communication following this move will be crucial for the Dollar and financial markets alike. In terms of US PMI data, the Services PMI showed a decrease from 54.4 to 52.4 in July, falling short of the expected 54. However, the Manufacturing PMI rebounded from 46.3 to 49, surpassing the market consensus of 46.4.

Today, the market will pay close attention to important economic data from both Europe and the US. From Europe, the Ifo Business Climate Index will be released, while the US will provide insights into CB Consumer Confidence.

The EUR/USD extended its selloff towards the lower parallel of the current bearish channel, reaching the 1.1060 support level, which aligns with the 100MA on the 4H chart. Additionally, the price is nearing the historical level of 1.1045, and a breakout below this point could potentially lead to a decline toward 1.1000.

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1.1400	1.1300	1.1250	1.1085	1.1046	1.1000