PMI data higher than expected
The eurozone manufacturing PMI and service PMI were better than expectations and higher than the previous month (51.9 vs. 51.5 est/51.0 last for manufacturing and 54.3 vs. 53.9 est./53.7 last). The better data, has helped the EURUSD has helped to keep the pair supported (it was rallying before the data).
From a technical perspective, the pair has been able to extend the next natural target at the 1.1000 level. This level is also represented by the 50% of the move down from the February 2015 high (see chart below). The next targets on the daily chart come in at the 1.1035 high from the FOMC spike and behind that the 1.1097 low from January 2015.
Looking at the 5 minute chart, the EURUSD has had an up and down time of it over the last few hours of trading. A sharp downward correction move, back below the high from yesterday and high from the far east session, sent the pair down to the 50% of the range (see chart below). Since the London corrective the low, the price has bounced back and forth - with support against the prior highs (see 1 and 2 circle) and the 38.2% retracement. Stay above and the buyers are in control. Move below and the choppy trading action will likely prevail.
If the price of the EURUSD were to close higher today (above 1.09445), it would represent the 6th higher close in 7 trading days. Of course in the middle was a sharp move higher and correction the next trading day. The price has yet to surpass the extreme from that day. A move above that extreme would make the buyers more confident/comfortable.
It is hard seeing the pair extending too high, but with weakish US data and the better numbers from Europe (off a low base), the market has room to roam. In addition to the 1.1035 and 1.1097 levels, the 61.8% at 1.1125 (see daily chart) and the 1.1209 are upside targets that are doable. The 1.1209 level is the 61.8% retracement of the post 1999 introduction range of the pair (see chart below).
