The Euro picked up steam yesterday after ISM Manufacturing PMI dropped to 47.8 in September, its lowest level since June 2009, confirming that the ongoing trade war with China is hurting the US economy. This weak data has reinforced the US recession fears, forcing markets to price in a higher probability of the Fed cutting rates in October. As of now, the market sees a 64% chance of the Fed reducing rates by 25 bps in October versus 40% seen before the ISM release. Today, the Single currency may rise towards 1.10 if the US ADP data prints below estimates.
The Single currency bulls found support at 1.0885 pushing price higher after breaking above multiple resistance levels. The buyers will be looking to extend their gains by first retesting the 50-day moving average at1.0960, and then possibly the 200-day moving average at the 1.10s.
Support: 1.0930 / 1.0885
Resistance: 1.0960 / 1.10