The EURUSD pair, currently at 1.0858, has managed to recover from previous declines and is now trading 0.21% higher. This comes as concerns about an economic downturn are present in both Europe and the United States.

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• EUR/USD reverses earlier losses, trading at 1.0858, up 0.21%, as recession fears loom on both sides of the Atlantic.

The pair currently trades last at 1.08613.

The previous day high was 1.093 while the previous day low was 1.0833. The daily 38.2% Fib levels comes at 1.087, expected to provide resistance. Similarly, the daily 61.8% fib level is at 1.0893, expected to provide resistance.

The Euro (EUR) reverses its course and trims its earlier losses that dragged the exchange rate to a new two-month low of 1.0802 on weaker Eurozone (EU) economic data, later mimicked by the United States (US). The fears of recession reignited on both sides of the Atlantic, though of late, the EUR/USD traded positively. At the time of writing, the EUR/USD exchanges hands at 1.0858, gains 0.21%.

Wall Street continues to trend up as market players brace for NVIDIA earnings reports. In contrast, bad economic reports on both sides of the Atlantic spurred speculations that the US Federal Reserve (Fed) and the European Central Bank (ECB) would pause their tightening cycle.

During the US session, S&P Global revealed that Manufacturing PMI dived further into contractionary territory at 47 from 49 in July and well below forecasts of an improvement to 49.3. The Services component dropped to 51.0 from 52.3 in July and missed expectations of 52.0. Consequently, the S&P Global Composite PMI, which involved both readings, stood at expansionary territory at 50.4, below the market’s expectation and July’s reading of 52.0,

The data weighed on the US Dollar (USD), weakening the buck and lifting the EUR/USD pair from around the 1.0800s area towards the 1.0830 area, followed by a leg-up towards the high 1.0860s, as US Treasury bond yields edged lower. The US 10-year Treasury Note is dropping 12 basis points at 4.208%, a headwind for the greenback.

A basket of six currencies measured against the American Dollar, the US Dollar Index (DXY), slips 0.17% and is down at 103.421.

Other data showed a US government report revealed that US Nonfarm Payrolls through March would probably be revised down by 306,000, smaller than analysts’ estimates of 500,000. Recently, US New Home Sales for July came at 4.4% MoM, exceeding the prior month’s data of -2.8%.

Across the pond, the EU business activity deepened into contractionary territory, with all the readings missing estimates, except for manufacturing activity. Germany revealed the exact figures, with services and composite further deteriorating while manufacturing ticked up. Given the backdrop, the ECB might refrain from increasing rates at the September meeting, as the whole bloc economy feels the pain of high interest rates as the central bank struggles to curb inflation.

Up next in the calendar, the US economic calendar will feature Durable Good Orders, the Chicago Fed National Activity Index, and Initial Jobless Claims. On Friday, the US Federal Reserve Chair Jerome Powell’s speech is much awaited by investors as they scramble for clues about upcoming monetary policy.

The EUR/USD daily chart portrays the pair as neutral to downward biased despite failing to crack the 200-day Moving Average (DMA) at 1.0797. Nevertheless, a daily close above the week’s open at 1.0866 is needed, so the EUR/USD pair could threaten the psychological 1.0900 level. In that outcome, the first resistance would be the August 23 high of 1.0871, followed by the 1.0900 mark. Otherwise, the EUR/USD could challenge the 1.0800 figure, followed by the 200-DMA.

Technical Levels: Supports and Resistances

EURUSD currently trading at 1.086 at the time of writing. Pair opened at 1.0846 and is trading with a change of 0.13 % .

The pair is trading below its 20 Daily moving average @ 1.095, below its 50 Daily moving average @ 1.0982 , below its 100 Daily moving average @ 1.093 and above its 200 Daily moving average @ 1.0797

The previous day high was 1.093 while the previous day low was 1.0833. The daily 38.2% Fib levels comes at 1.087, expected to provide resistance. Similarly, the daily 61.8% fib level is at 1.0893, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 1.0809, 1.0772, 1.0711
• Pivot resistance is noted at 1.0907, 1.0967, 1.1004

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