There was a bit of a brief jump earlier from 0.9905 to 0.9930 after the PMI data before the dollar seeing gains pared saw the pair move up to near session highs around 0.9950. The momentum has quickly dissipated though as sellers remain in control below parity. The hold below the 14 July low at 0.9952 also keeps the bias tilted more to the downside on the day.
As much as there were some parts of the PMI data earlier that were not as bad as feared, it was still another set of economic releases that puts the euro area closer towards a recession. There might be some bright spots in the sense that inflation pressures were a little better and supply chain issues were seen less prominent, but we are seeing labour market conditions start to take a hit and economic activity slowing down further in August.
On the balance of things, there is still little to no reason to be optimistic about the euro in my view.
The hold below parity for EUR/USD will put the focus towards 0.9800 and 0.9500 as the next key technical targets. The slight improvement in the risk mood on the day has helped to slow things down as the bullish dollar sentiment hits pause but there hasn't been a significant shift to suggest a push back above parity for the pair.
