EUR/USD price action has been in a consolidative stalemate beneath the 1.3000 handle and around a 50% Fibonacci retracement since the start of trade this Wednesday in Asia. However, the pair is expected to be impacted by events later in the global day.
A slew of eurozone PMIs for October are on offer in the session ahead, with German Manufacturing PMI expected to come in at 48.0 vs. 47.4, which would be the highest reading since March if realized; the Services PMI is expected to register a 50 reading for the first time in three months.
Also, ECB Chief Mario Draghi will speak monetary policy before the German Bundestag today, and will hold a news conference afterward. "In the meantime, I expect tight [EUR/USD] range trading to prevail between 1.2950/1.3020," comments Sean Lee, founder of FXWW. Afterward, the spotlight will then shift to the conclusion of the U.S. Federal Reserve's two-day FOMC meeting; it is expected to keep its monetary policy on hold.
Technically speaking, EUR/USD currently sits quietly at the 1.2985 mark in late Asia, but the risk remains to the downside, says Fan Yang, CMT, Chief Technical Strategist at FXTimes.com:
The 1.28 level still remains a significant level and the Euro is likely to test this level again should it continue to ease off from the resistance level above 1.3150 and maintain its break through the support level at 1.30.
Valeria Bednark, Chief Analyst at FXstreet.com holds a similar perspective for EUR/USD, arguing that the technical outlook is bearish although, for the moment, has lost some momentum. "While the pair bounced from a quite significant level (1.2950), as long as below 1.30, risk remains to the downside for the pair, with a break below 1.2950 pointing for a retest of the 1.2820 price zone," explains Ms. Bednarik.
EUR/USD's test of 1.2965/45 support (21-day EMA, 61.8% Fibonacci) seems to be holding for now, and further downside extensions may encounter support at 1.2910 (the October 15 high) while the 1.3010 level offers resistance on rallies.