EUR/USD extends the corrective slide towards 1.1350, ISM eyed

The EUR/USD pair accelerated its declines below 1.14 handle in the European session, as the bid tone behind the US dollar strengthened across the board, with the bears now heading for a test of 1.1350 support.

EUR/USD: Focus shifts to US ISM manufacturing PMI

The main currency pair extends its retreat from multi-month tops for the second straight session today, despite stronger manufacturing PMI reports from the Euro area economies, as markets continue to take profits off the table on their USD short amid belief that the recent USD sell-off was excessive.

Although the monetary policy divergence between the ECB and Fed has narrowed after the ECB President Draghi’s hawkish twist, the Fed continues to remain on track to begin the normalization of balance sheet as early as this Sept, the FOMC minutes due today could suggest.

Looking ahead, the next test for the USD recovery lies the upcoming US ISM manufacturing PMI data due out in the NA session today, while the  positioning rebalancing with little interest to add fresh longs will continue ahead of the US Independence Day holiday tomorrow.

EUR/USD Technical Levels

According to Valeria Bednarik, Chief Analyst at FXStreet: “The pair has an immediate support at 1.1345, with a break below it opening doors for a steeper corrective movement, down to 1.1290, the low set on June 28th. Seems unlikely a break below this last, with buying interest probably defending the level. To the upside, 1.1410 is the immediate resistance, ahead of the 1.1440/60 region, this last a major long term resistance.”