EUR/USD fell to a one-week low on Friday, extending the sharp decline from Thursday, as the pair faced renewed pressure from downbeat PMI data.
Reports released on Friday indicated a slowdown in the services industry in the Eurozone and its two largest economies, Germany and France, in June. The manufacturing sector downturn also accelerated, further darkening the overall economic outlook.
The weak data suggest that the recent ECB rate cut of 25 basis points on June 6 has yet to positively impact economic activity, indicating a prolonged and challenging recovery.
The euro fell further as the disappointing data soured sentiment. Bears tested the Fibonacci support at 1.0675 (76.4% of 1.0601/1.0915), and a close below this level could pave the way towards the key support at 1.0601 (the 2024 low posted on April 16).
Technical indicators on the daily chart are fully bearish, with strengthening negative momentum and multiple moving average bear crosses supporting the downward move. The declining 10-day moving average (1.0735) provides strong resistance and is expected to cap any upticks, guarding upper pivots at 1.0767/85 (the 55-day and 200-day moving averages, respectively). Limited upward movements will also maintain the broader bearish trend and offer better levels for re-entering the bearish market
