Euro Struggles Below 1.1400 Despite Strong PMI Data

Traders' Opinions

Summary:

The Euro edged higher on Friday after stronger-than-expected Eurozone and German PMI data, but gains remained limited as escalating Middle East tensions, soaring oil prices, and renewed US tariffs continued to fuel demand for the safe-haven US Dollar.

SELL EURUSD

EXP

PENDING

1.13900

Entry Price

1.12400

1.15000

1.13686 -0.00078 -0.07%

Pips

PENDING

1.12400

Exit Price

1.13900

Entry Price

1.15000

The Euro traded modestly higher against the US Dollar on Friday but remained below the 1.1400 mark as stronger-than-expected business activity data failed to overcome mounting geopolitical risks and broad demand for the Greenback. Although the latest PMI surveys pointed to improving economic momentum across the Eurozone, investors remained focused on escalating tensions in the Middle East and the inflationary impact of surging oil prices.

Fresh data showed that Eurozone manufacturing activity accelerated to 52.0 in July, while the services sector unexpectedly returned to expansion. Germany also delivered stronger-than-expected PMI figures, with both manufacturing and services outperforming market forecasts, suggesting Europe's largest economy is showing signs of stabilization.

Despite the encouraging data, market sentiment remained firmly risk-averse. Brent crude climbed above $90 a barrel following reports of attacks on Saudi vessels in the Red Sea, raising concerns about energy supplies and increasing the economic risks facing the Eurozone. At the same time, President Donald Trump warned of a possible large-scale military response against Iran, further boosting demand for the safe-haven US Dollar.

Adding to market uncertainty, the US administration unveiled new tariffs ranging from 10% to 12.5% on imports from more than 80 trading partners, including the European Union, reigniting fears of a broader global trade dispute.

Technical Analysis

EUR/USD remains trapped in a broader bearish structure despite several attempts to recover from its late-June lows. On the 4-hour chart, price continues to trade within a rising corrective channel after failing to reclaim the 1.1455–1.1460 resistance zone. The latest rejection from that area suggests bullish momentum is fading, with the pair now hovering around 1.1390 and threatening another move lower.

The ascending trendline has provided support throughout the recent recovery, but buyers are beginning to lose control as the pair posts lower highs within the channel. A decisive break below the 1.1370–1.1360 support area would confirm a bearish breakdown and expose the next major downside target around 1.1240, where the next significant demand zone is located.

On the upside, bulls need to regain the 1.1455–1.1460 resistance region to invalidate the current bearish outlook. A sustained move above this barrier would shift momentum back in favor of buyers and open the door for a retest of 1.1520, followed by the 1.1580 resistance zone. Until then, rallies are likely to be viewed as selling opportunities within the broader downtrend.

Momentum continues to favor sellers. The repeated failure to break above resistance, combined with weakening price action near the ascending trendline, suggests the recent rebound is losing steam. Unless buyers can reclaim key resistance levels, the technical structure continues to point toward further downside.

TRADE RECOMMENDATION

SELL EUR/USD

ENTRY PRICE: 1.1390

STOP LOSS: 1.1500

TAKE PROFIT: 1.1240

Risk Warnings and Disclaimers

You understand and acknowledge that there is a high degree of risk involved in trading. Following any strategies or investment methods may lead to potential losses. The content on the site is provided by our contributors and analysts for information purposes only. You are solely responsible for determining whether any trading assets, securities, strategy, or any other product is suitable for investing based on your own investment objectives and financial situation.

Risk Disclosure

The risk of loss in trading financial instruments such as stocks, FX, commodities, futures, bonds, ETFs and crypto can be substantial. You may sustain a total loss of the funds that you deposit with your broker. Therefore, you should carefully consider whether such trading is suitable for you in light of your circumstances and financial resources.

No decision to invest should be made without thoroughly conducting due diligence by yourself or consulting with your financial advisors. Our web content might not suit you since we don't know your financial conditions and investment needs. Our financial information might have latency or contain inaccuracy, so you should be fully responsible for any of your trading and investment decisions. The company will not be responsible for your capital loss.

Without getting permission from the website, you are not allowed to copy the website's graphics, texts, or trademarks. Intellectual property rights in the content or data incorporated into this website belong to its providers and exchange merchants.

Recent Searches

Top Searches

Markets

Analysis

User

24/7

Economic Calendar

Education