The EUR / USD pair is trading near weekly lows amid a stronger dollar, whose index has grown by almost 0.2% since the beginning of the day.
The dollar is trading higher despite the publication of weak PMI data on manufacturing and services sectors. For the first time since 2009, PMI in the manufacturing sector dropped below 50, indicating a decline in manufacturing activity.
Investors also ignored another inversion of the yield curve of US government bonds (the yield of 10-year government bonds fell below the yield of 2-year bonds), which is a signal of an approaching recession in the US economy.
The driver for the dollar growth was the comments of some Fed representatives who are skeptical about the idea of further lowering interest rates.
Many investors hope that Fed Chairman Jerome Powell, who will speak at Jackson Hole at the annual economic symposium today, will be able to clarify the situation with the Fed’s future monetary policy plans.
There are no important events in the EU economic calendar today.
On the chart, the currency pair still continues to move within the price channel 1.1070-1.1110. At the same time, today we see increased pressure on the lower border of the sidewall, which significantly increases the likelihood of a breakdown of this level and further development of the downward movement in the direction of the levels of 1.1035 and 1.1000.
Resistance levels: 1.1110, 1.1175, 1.1240.
· Support levels: 1.1070, 1.1035, 1.1000.
The main scenario is a breakdown of support at 1.1070 and a decline to 1.1000.
An alternative scenario is consolidation in the range of 1.1070-1.1110.
Locally, this instrument is dominated by a moderately negative news background. On the chart there are prerequisites for the price to exit the horizontal channel down. Short-term preference is given to sales, which should be considered in the range of 1.1090-1.1110.