On Thursday (October 24th) during the European session, the EUR/USD maintained its recovery momentum around 1.0800. PMI data from Germany and the Eurozone showed a slowdown in economic activity in early October, helping the euro maintain resilience relative to its competitors.

At the time of profit taking in the US dollar, the EUR/USD has ended its three-day downward trend, but the US dollar is still supported against major currencies at levels close to three-month highs.

Due to the ongoing economic contraction, there is still pressure for the European Central Bank to continue cutting interest rates, as growth prospects remain a concern for the ECB.

Yesterday, European Central Bank President Christine Lagarde stated that the central bank needs to be cautious when considering further interest rate cuts. Earlier this week, she stated that inflation may fall below the target faster than expected, paving the way for further interest rate cuts. Some policy makers are even considering lowering interest rates below neutral to stimulate the economy.

At the same time, due to profit taking, the US dollar has weakened but is still close to its recent high, supported by hawkish statements from the Federal Reserve and expectations that the Fed will gradually cut interest rates after optimistic data is released. The US PMI data will also be released today, and is expected to show a stable level of 55 for the service sector PMI in October, while the contraction rate of the manufacturing sector has slowed down.

Due to the uncertainty of the US presidential election in two weeks, safe haven funds have also boosted the US dollar.

technical analysis

(EUR/USD daily chart)

The euro fell against the US dollar from 1.12, breaking below several key support levels. It is testing the upward trend line support level of 1.0770. The relative strength index is in an oversold area, so sellers should remain cautious.

Bears will seek to break below the trend line support, allowing the integer 1.07 to take effect.

At the same time, buyers will seek to break through the integer of 1.08 and then be exposed to the 200 moving average's entry level of 1.0870. If this level is broken, buyers may gain some traction at 1.09.