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EUR/USD Faces Potential Losses Below 200-Day SMA Amid Weaker PMI Data

The EUR/USD currency pair is under increased selling pressure, with a critical test of the 1.0800 region now underway. Economic indicators, technical analysis, and market trends all suggest potential further losses.

Price Analysis: Extra Losses Loom Below the 200-day SMA

The EUR/USD has extended its weekly downward trend, approaching the boundaries of the 1.0800 region on Wednesday. The pair is now expected to challenge the significant 200-day Simple Moving Average (SMA) at 1.0797. A subsequent drop below the 200-day SMA could result in further losses, with a potential target being the May low of 1.0635 (May 31).

Economists at Scotiabank provided an analysis, expressing concern over the EUR/USD technical outlook. According to them, “The EUR/USD pair has given back nearly 3/4 of the May/July rally from 1.0635/1.1275, and weakness through the mid/upper 1.08s leaves the technical undertone here looking soft.” The crucial support levels are identified at 1.0750/1.0775, while resistance is noted at 1.0835/1.0845.

Fundamental Analysis: Eurozone PMI Data Reflects Softness

Further complicating the picture for the Euro, preliminary Eurozone PMI data indicated slightly better-than-expected manufacturing trends in Germany and France. However, weaker-than-expected services activity in both countries pushed the Eurozone services index down to 48.3, against expectations of 50.5 and July’s reading of 50.9. The composite index experienced a drop to 47 from 48.6, where a milder decline to 48.5 had been anticipated.

The steady losses in EUR have now extended near the 200-Day Moving Average (1.0799), reflecting a broader market sentiment impacted by economic indicators.

Outlook and Implications

The combination of soft PMI data and technical analysis suggests that the EUR/USD may continue its downward trajectory in the near term. Traders and investors should be cautious, watching for potential support and resistance levels and keeping a close eye on the critical 200-day SMA.

Immediate actions and considerations for traders might include:

  • Monitoring the support and resistance levels closely
  • Analyzing further Eurozone economic data that may impact the EUR
  • Considering hedging strategies to mitigate potential losses if the pair continues to decline

Overall, the outlook for EUR/USD seems to be characterized by heightened uncertainty, influenced by both fundamental and technical factors. It serves as a timely reminder of the interconnected nature of economic data, market sentiment, and trading dynamics.


👉ENTRY PRICE: 1.0800
✅TAKE PROFIT: 1.0750
❌STOP LOSS: 1.0835


With the combination of soft PMI data and a weak technical outlook, the EUR/USD pair seems set to continue its downward trend. The significant 200-day SMA has been tested, and a breach below this level could instigate further losses. Support levels identified at 1.0750/1.0775 and resistance at 1.0835/1.0845 set clear parameters for the trade.


  1. Monitor the 200-day SMA and EUR/USD price movements around 1.0800.
  2. Enter a short position if the pair breaches the 1.0800 level, targeting support at 1.0750.
  3. Set a stop loss at 1.0835 to mitigate potential reversals.
  4. Keep an eye on Eurozone economic data and technical indicators for further insights.


The current market sentiment and technical analysis point toward a potential sell opportunity for EUR/USD. A well-defined trade plan, with a close watch on key support and resistance levels, will be essential in navigating this opportunity. The trade reflects both immediate market reactions and future financial implications, demanding a strategic and vigilant approach.