Eurusd Moves Lower On Pmi

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Eurusd Moves Lower On Pmi

Eur/Usd Moves Lower On Weak Eu Pmi

EUR/USD has managed to recover some of its losses, but the overall trend is still this. The EUR/USD is vulnerable after the release of the Eurozone's PMI for November, which showed a contraction of business activity.

The Eurozone's PMI showed a reading of 48.1, while the expected reading was near 50.0. As the reading is under 50.0, that's a sign that the economic activities in the EU have contracted during the time period.

Eurozone Services Pmi Declines To 49.2

The major weakness came from the Services PMI which has dropped expectedly. A quick look at the Services PMI shows it has declined to near 49.2 against the reading of 51.8. This marks the first time that the Services PMI has declined since January.

Most of the ECB officials have also expressed their concerns about the weak economic growth and potential headwinds. This has to do with the upcoming trade wars with the USA once Donald Trump becomes president.

Recently, the Central Bank of Cyprus' Governor made it clear that trade restrictions will lead to more inflation. In fact, it could even lead to stagflation in the Eurozone.

Many other ECB officials also warned about the potential implications of trade tariffs by the US government. According to them, such tariffs will once again lead to more trade conflicts around the world.

As of now, EUR/USD continues its slide down and is trading around 1.0330, the 2-year low for the pair. The weakness in the EUR/USD intensified after the pair lost the 1.0500 support. The technical indicators, such as the EMAs, also show a declining slope, which means more downside is ahead for EUR/USD.

The RSI (14) indicator is seen in the 20 - 40 range which is also a sign of more weakness for the EUR/USD. On Friday, the EUR/USD appeared to have found a bottom near 1.0332.

But, if EUR/USD fails to hold the 1.0332, it will mean a visit towards the 1.0300 handle. On the other hand, a break above 1.0500 is needed to signal a trend shift in EUR/USD.

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