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EURUSD : Continues to Decline

EURUSD : Daily Chart

EURUSD finds resistance from a falling resistance trend line trimming its gains again reaching the support at 1.2612 which seems to be a key support as the pair tried to break below it before also but was not able to hold losses below it. However seems like selling pressure has been created within this area and we might see the pair continue its decline below this level. The moving averages on the chart are also signaling a downtrend continuation. The next support level it may find at 1.2507 if it continues to decline.

In terms of fundamentals, the pair found support after the PMI data showed that the business activity ticked up a little bit in October. According to the data the manufacturing output expanded at the fastest face in three month. The preliminary manufacturing PMI ticked up to 50.7 from a final reading of 50.3 in September which economists were expecting to decline to 49.9. The services PMI remain unchanged at 52.4 slightly above expectation of 52.

On the other hand, unemployment claims report showed that the number of people filling for unemployment benefits rose by 17K to 283K from the reading of 266K last week which economists were expecting to rise to 269K. The four week average which is considered as a better gauge for the labor trends declined by 3K to 281K marking the lowest level in 14 years.

EURUSD : Hourly Chart

On the hourly chart, the pair have started following a falling channel trend and currently testing the resistance trend line of the channel. A break above the channel might bring some gains to the pair other it will continue to decline within this channel.