Ella 
In early Asian trading on Wednesday, the EUR/USD pair maintained resistance at the 1.0600 mark after pulling back from around 1.0700. A rebound in the U.S. dollar and better U.S. economic data supported EUR/USD’s decline. EUR/USD is currently trading around 1.0593, with an intraday increase of 0.03%.
The latest PMI data, with the U.S. PMI coming in better than expected on Tuesday, boosted the dollar. The Composite Purchasing Managers’ Index climbed to 51.0 from 50.2 in October. The services purchasing managers’ index rose to 50.9, and the manufacturing purchasing managers’ index rose to 50.0. It was the first time in six months that manufacturing did not fall below 50. In addition, the Richmond manufacturing index fell to 3 in October from the previous value of 5, which was lower than expected.
In other words, strong U.S. economic data alleviated market concerns that tightening monetary policy and raising borrowing rates would curb investment and industrial activity. However, the market will get more clues from U.S. economic growth data released on Thursday. If economic data is weaker than expected, it could push the dollar lower and limit the downside for EUR/USD.
In terms of the euro, Eurozone economic data released on Tuesday showed that the Eurozone purchasing managers index fell back in October and inflation fell. The data supports expectations that the European Central Bank will keep interest rates unchanged on Thursday.
The euro zone’s composite purchasing managers’ index fell to 46.5 in October from 47.2 in September. It was the sixth consecutive reading below 50, suggesting the euro zone’s economic slowdown continues. At the same time, the manufacturing purchasing managers index fell to 43.0 from 43.4, lower than the expected value of 43.7. The services PMI fell to 47.8 from 48.7 previously. Dismal Eurozone economic data has put some selling pressure on the euro, preventing EUR/USD from rising.
On Wednesday, market participants will focus on German IFO data and a speech from European Central Bank President Christine Lagarde. On Thursday, focus will turn to the preliminary US third-quarter gross domestic product (GDP) and the European Central Bank’s interest rate decision. The U.S. core personal consumption expenditures (PCE) index will be released on Friday. These events will provide direction for EUR/USD.
