EUR/USD falls to a low of 1.1341 before coming back up to 1.1370
The single currency fell against the greenback towards the support region near 1.1338-46 - there's also daily trendline support @ 1.1337 - before coming back up again in a move that now closes back in on the 100-hour MA (red line).
The data releases earlier were poor to say the least. Although there was a rebound in French factory activity, services were starkly poor. Markit notes that some firms were attributing the poor sentiment to continued disruptions after the yellow vest protests. But still, it's not a promising sign to say the least.
Meanwhile, in Germany, factory activity slumped into contraction territory and hit a 50-month low. Despite the fact that services is holding up, it's not an area where Germany can consistently rely on to pull the weight of its economy.
As for EUR/USD price action, I think it's a big tell on what markets are expecting ahead of the ECB later today. The case being that the bar is set really low for any rebound in the euro right now.
Markets are expecting a dovish ECB and Draghi later today and the data here only reaffirms that they should at least acknowledge a further slowdown in the economy. But still, I don't see it warranting a change in rate guidance or a massive change in the economic outlook just yet.
I would expect sellers to still prevail near the 100-hour MA @ 1.1371 given now we're looking to break below it. But it's going to take a real dovish surprise later to send the euro below 1.1300 against the dollar.
Barring any ignorance by the ECB and Draghi to brush aside the slowdown as still being temporary, lows near 1.1330 may be just about as good as it gets for sellers. That said, buyers don't have much to cheer about either if Draghi sticks to the script. But as mentioned, the bar is really low for the euro to jump given that plenty of the dovishness is priced in right now.
