Traders of the euro have finally received the chance to recoup some of their losses. In our video review on InstaForex TV channel, we will find out how stable the current uptrend could be.
The eurozone services PMI advanced to 49.6 points from 45.7 points, slightly exceeding the preliminary estimate of a rise to 48.8 points. Nevertheless, the indicator is still below the 50-point threshold that separates expansion from stagnation.
The eurozone composite PMI also increased more than expected. Economists foresee a jump to 52.5 points from 48.8 points. In fact, the indicator reached the level of 53.2 points. Despite such positive data, the euro has been stagnant since the beginning of the day. This proves a speculative character of its appreciation in the last two days. That is why the euro may soon begin losing in value. It is quite possible that market participants are waiting for a good reason for that.
Although the UK business activity rose, it turned out to be below the flash data. Thus, the services PMI climbed to 56.3 points from 49.5 points. Economists had predicted an increase to 56.8 points.
According to the preliminary estimate, the UK composite PMI should have jumped to 56.6 points from 49.6 points. However, it showed smaller growth to 56.4 points. Nevertheless, the indicators are above the 50-point threshold and continue rising. These reports allowed the pound sterling to recoup some of its morning losses caused by news about the suspension of AstraZeneca vaccine trials for children. This means that vaccination of children will be delayed for an indefinite period of time. This is an extremely negative factor.
The macroeconomic calendar is absolutely empty until the end of the trading day. The FOMC meeting minutes will be published rather late. Moreover, the document is likely to repeat Jerome Powell’s speech provided at the press conference. It means that there will be no new information for the markets. However, judging by the speculative nature of the euro’s appreciation, the US dollar may start actively gaining in value before the publication.
Let us take a look at the trading charts. Yesterday, amid the speculative interest, the euro/dollar pair broke the upper limit of the range located at 1.1820. The pair advanced by 70 pips. Notably, the price began changing during the US trading session.
Analyzing the current chart, we can see that the pair got stuck during the Asian trade. Accumulation took place within the range of 1.1864 and 1.1881.
Judging by the accumulation process, it is possible to predict a new jump. Trade positions will have a target located at the broken level.
Yesterday, the pound sterling was also influenced by speculators. As a result, the quote dropped to the level logged at the beginning of this week.
On the chart, we can see that speculators are still pushing the price lower. At the beginning of the European session, the price already lost 60 pips.
If the pound/dollar pair fixes below 1.3800, it may continue its downward correction from the peak of the mid-term trend located at the level of 1.4224 towards 1.3669.