KTM FX Weekly: Euro crosses offers better trading opportunities

The common currency pushes back lower after the German general election outcome, not significantly. At the time of preparing, this euro is trading at 1.1700 holds the ground at 1.1750. For the past five sessions, the price action has been 1.1750, which could be a temporary intraday support. Break down below could lead to 1.1660 and 1.1600-1.1575. Overall, a thick 100 pips support layer sitting between 1.1660-1.1575. 

We are waiting for a weekly and monthly closing picture. So far, the price has lowered three weeks in a row; now we are sitting at 4th week. 

Data-wise, flash PMIs for September were recorded lower. 

• Flash Germany Services PMI Activity Index recorded at 56.0 vs. Aug: 60.8. 4-month low.
• Flash Germany Manufacturing PMI at 58.5 vs. Aug: 62.6). 8-month low.
• Flash Eurozone Services PMI Activity Index at 56.3 (59.0 in August). 4-month low.
• Flash Eurozone Manufacturing PMI at 58.7 (61.4 in August). 7-month low.

September’s flash PMI survey showed a notable slowdown in the rate of growth of the German

economy, a sign that activity is beginning to level off after rebounding sharply over the summer, Phil Smith, Associate Director at IHS Markit, commented on the flash PMI data. 

Looking ahead on the macro side, September CPI is due on Friday. Besides a couple of speeches from the ECB members, including Lagarde and lane. 

Trading-wise, we still believe euro crosses offer better trading opportunities. EURCHF offers dip-buying opportunities and EURAUD sites in favor of bears. 

Regarding our subject currency, the trend remains towards the South. We stay neutral at a 10-month low. If the price is moving higher, watch our resistances at 1.1760. A decisive breakout higher above 1.1760 could allow the price to bounce further towards 1.1850 levels. 

It is important to always keep in mind the risks involved in trading with leveraged instruments.

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