Is the EUR/USD ready to turn lower?
We have been anticipating a reversal of the EURUSD at the longer-term 61.8% Fibonacci retracement level at the 1.0960 level on the Week Ahead video and in recent daily FACE shows. This rejection of the 61.8% retracement was pronounced this week, however, the next could days will be critical for this reversal to take place. Tomorrow, although a US holiday, will have Eurozone (German and French) PMI's and on Friday, US PMI's will be released. In order for the EURUSD to continue lower back below the 200dma, we will have to see continued lower European PMI's and more specifically, the US PMI's to remain above 50, which isn't the case for the manufacturing data. If Eurozone data improves and the US data continues to slip below expectations, this move to the 1.0850s may prove to be a pullback to be bought.
A break of the 1.0766 level would suggest the EURUSD may be ready to move back toward the 1.05XX level.
