Ichimoku analysis (4-hour chart)
Tenken-Sen- 1.06768
Kijun-Sen- 1.06768
EURUSD pared some of its gains despite strong German PMI data. It hit a low of 1.06149 at the time of writing and is currently trading around 1.06443.
German flash manufacturing PMI came at 39.8 in Sep, compared to a forecast of 39.50. Services PMI jumped to 49.80 in Aug, above expectations of 47.20. The number of people who have filed for unemployment benefits decreased by 200000 in the week ended Sep 16 to 201K, compared to a forecast of 224K.
Markets eye US flash manufacturing and services PMI data for further direction.
According to the CME Fed watch tool, the probability of a no-rate hike in Nov increased to 73.8% from 63.0% a week ago.
The US 10-year yield surged sharply after Fed monetary policy. The US 10 and 2-year spread narrowed to -63% from -75%.
The pair trades below short-term 21 EMA, below 55 EMA, and long-term (200-EMA) in the 4-hour chart. Any break below 1.0600 confirms further bearishness. A decline to 1.0500/1.04350 is possible. The near-term resistance is around 1.0660, any breach above targets is 1.0700/1.0760.
Indicator (4-hour chart)
CCI – Bearish
Directional movement index – Bearish
It is good to sell on rallies around 1.0708-10 with SL around 1.0765 for a TP of 1.0600.
