EUR/USD Prediction for September 1, 2016

The EUR/USD rebounded from session lows, following softer than expected manufacturing data released in the U.S. morning.  Prices were able to hold support levels near the 200-day moving average at 1.1118.  Resistance is seen near the 10-day moving average at 1.1252.  Momentum has recently turned negative as the MACD (moving average convergence divergence) index generated a sell signal. This occurs as the spread (the 12-day moving average minus the 26-day moving average) crosses below the 9-day moving average of the spread.  The index moved from positive to negative territory confirming the sell signal.

U.S. Chicago PMI dropped 4.3 points to 51.5 in August after dipping 1 point to 55.8 in July. It’s the weakest reading since May’s 49.3. It was 52.9 a year ago. Activity in the region is highly dependent on the fluctuations in vehicle manufacturing.