EURUSD: the euro may lose ground following a surge

Although the EURUSD technical analysis for today suggests a decline in the pair following a correction, the outlook will depend on fundamental data from the eurozone and the US. Find out more in our analysis dated 5 August 2024.

EURUSD trading key points

• Eurozone services PMI: previously at 52.8%, forecasted at 51.9%
• US services PMI (July): previously at 55.3, forecasted at 56.0
• US ISM non-manufacturing PMI: previously at 48.8, forecasted at 51.4
• EURUSD forecast for 5 August 2024: 1.0950, 1.0850, and 1.0777

Fundamental analysis

Analysis for 5 August 2024 shows that fundamental data could significantly impact the behaviour of EURUSD. Data on indices from many European countries, including the overall services PMI for the eurozone and the US, will be published today. The eurozone’s index data is projected to be 0.9 points lower than the previous value. The services purchasing managers’ index measures the activity of purchasing managers. Readings above 50 indicate an increase in business activity and, consequently, in services, which could positively impact the euro, especially if actual data exceeds the forecast. Conversely, readings below 50 suggest a decline in activity.

The US services PMI is expected to rise by 0.7 points. Overall, this indicator could positively impact the value of the US dollar against the euro.

The US ISM non-manufacturing PMI is projected to increase significantly to 51.4 from the previous 48.8. Data is expected to exceed the 50.0 level, potentially boosting investor sentiment and putting downward pressure on the EURUSD rate.

EURUSD technical analysis

The EURUSD H4 chart shows the market has broken above the 1.0848 level amid the news and extended the range towards 1.0920. A compact range is now forming below this level. The EURUSD rate could rise to 1.0950 today, 5 August 2024. Subsequently, a new decline wave might begin, aiming for 1.0850 and potentially continuing to 1.0777, the initial target.

Summary

The EURUSD technical analysis, combined with the eurozone and US index data, suggests that today’s EURUSD forecast might see a rise to 1.0950, followed by a decline to the 1.0850 and 1.0777 levels.