Forex recap: EUR/USD cools from a test of higher levels as Eurozone PMIs surprise to the downside
EUR/USD has eased from session highs around 1.1764 and sits essentially flat on the day near 1.1750, pressured by softer-than-expected Eurozone PMIs. Both services and manufacturing data missed expectations, weighing on the single currency.
Eurozone Services PMI slipped to 52.6, down from 53.6 in November and shy of the 53.9 analysts anticipated. Manufacturing also contracted more than expected, at 49.2 versus 49.6 in November, with consensus anticipating a slight uptick to 49.2.
Germany mirrored the broader trend: Manufacturing PMI fell to 47.7 from 48.2, and Services slowed to 52.6 from 53.1. In France, Services PMI declined to 50.2 from 51.4, while manufacturing unexpectedly expanded to 50.6 in December from 47.8 in November.
Looking ahead to the US session, attention turns to the October and November Nonfarm Payrolls reports. These readings are expected to shed more light on the pace of the US labor market, though the picture may be incomplete due to data gaps caused by the recent government shutdown.
Euro price snapshot
The table below shows the daily percentage changes for the euro (EUR) against major currencies. The euro posted its strongest performance against the Canadian dollar among the listed pairs.
USD EUR GBP JPY CAD AUD NZD CHF
USD -0.04% -0.23% -0.26% 0.02% 0.02% -0.04% -0.03%
EUR 0.04% -0.20% -0.22% 0.08% 0.06% 0.02% 0.01%
GBP 0.23% 0.20% -0.04% 0.26% 0.26% 0.20% 0.20%
JPY 0.26% 0.22% 0.04% 0.29% 0.29% 0.22% 0.23%
CAD -0.02% -0.08% -0.26% -0.29% -0.01% -0.06% -0.05%
AUD -0.02% -0.06% -0.26% -0.29% 0.00% -0.06% -0.05%
NZD 0.04% -0.02% -0.20% -0.22% 0.06% 0.06% 0.00%
CHF 0.03% -0.01% -0.20% -0.23% 0.05% 0.05% -0.00%
Market heat map note: The base currency is listed on the left; the quote currency is on the top row. The highlighted cell shows the percentage change for EUR/USD when EUR is the base and USD is the quote.
Daily digest: dollar soft ahead of key US payrolls data
- The euro remains near recent highs as traders price in more potential Fed rate cuts, while the ECB is widely expected to keep rates on hold at the upcoming meeting and may hint at a hike later in 2026.
- US data released Monday undercut the dollar, with the Empire State Manufacturing Index dropping to -3.9 in December, well behind expectations of 10.6 and below November’s 18.7.
- Eurozone industrial production surprised to the upside in October, rising 0.8% month over month, stronger than the 0.1% consensus; annual growth also picked up to 2% from 1.2% in September.
- Ukraine peace negotiations continued, with the US offering NATO-style security guarantees to Kyiv following a Berlin meeting between President Trump and President Zelenskiy, a development seen as supportive for the euro.
- In the US, payrolls data are anticipated to show a roughly 40,000 rise in November, with the unemployment rate held at 4.4%. October payrolls will also be released, though the jobless rate may not be published due to data gaps. Retail sales for October are expected to rise 0.2%, with autos excluded, reflecting a similar pace to September.
Technical outlook: EUR/USD showing signs of a short-term pause
The euro-dollar pair remains in an overall bullish trend, but recent upside attempts failed to clear the week’s high near 1.1763. Technical indicators hint at mellowing momentum: the 4-hour RSI shows bearish divergence, though still within broadly bullish territory, and the MACD recently crossed below its signal line, signaling a potential deeper correction.
Key levels to watch:
- Support: 1.1720 (December 12 low), then 1.1685 (December 11 low), and 1.1615 (December 9 low).
- Resistance: 1.1760–1.1770, followed by the October 1 peak around 1.1780. A break above this resistance would shift focus toward the 1.1820 area near the September highs.
Economic indicators to monitor
HCOB Manufacturing PMI: A leading gauge of Eurozone manufacturing activity, compiled by S&P Global and Hamburg Commercial Bank. Readings above 50 signal expansion; below 50 signal contraction. The latest release shows 49.2, undershooting the 49.9 consensus.
HCOB Services PMI: Tracks services sector health, with readings above 50 indicating expansion. The latest reading is 52.6, below the 53.9 consensus.
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