EUR/USD cannot stay calm for too long, especially with the death cross above its head

• The EUR/USD is trading around 1.17 in another calm day in financial markets.
• Euro-zone PMI data did not rock the boat but the US figures certainly can.
• The technical picture is gradually improving, apart from the death cross pattern.

The EUR/USD is trading around 1.1700 in the second day of calm trading, something that has not characterized the pair in recent weeks. The Italian government is getting comfortable and in Spain, the freshly minted PM Pedro Sanchez is nominating his cabinet members. No imminent crisis is facing these debt-stricken countries. Fears about Italy’s position in the euro-zone were left, right, and center last week.

Euro-zone purchasing managers’ indices for the services sector came out within expectations. The euro-zone PMI hit 53.8 against 53.9 projected, no big change. Later today, the President of the German Bundesbank Jens Weidmann will speak.

The bigger elephant in the room remain’s Trump’s tariffs. The US Administration implemented steel and aluminum tariffs on the EU, Mexico, and Canada. Also here, nothing has happened in Europe but the sense of calm is probably false. The bloc is preparing retaliatory tariffs. It just takes a longer time. So far, trade issues have slightly helped the EUR/USD, but this is unlikely to last for too long.

Later today, the ISM Non-Manufacturing PMI will provide insights about America’s wide services sectors. An increase is expected from 56.8 seen in April. See the preview: A pick up may trigger a resumption of the USD rally

Also note the JOLTs Job Openings, a lagging, yet an employment indicator eyed by the Federal Reserve.

EUR/USD Technical Analysis

Downside momentum has waned and the RSI is gradually rising from the abyss and back to balanced territory. On the other hand, the 50-day Simple Moving Average is quickly falling towards the 200-day SMA. When the 50 crosses the 200 to the downside, the pattern is known as the “death cross”. Will this doom the EUR/USD?

Support awaits around 1.1676, which was a swing low on the way down and also a low point seen on June 4th. Lower, the pair faces support at 1.1610 which was also a stepping stone towards the lower ground as well as the June 1st trough. 1.1550 was the November 2017 low and 1.1510 is the 2018 trough.

On the topside, 1.1726 capped the pair on several occasions on May 28th. They are followed by 1.1767 which was a low point in mid-May. The 1.1822 point was a swing low on May 9th.

More: EUR/USD Forecast: Already 200 pips off the lows, how high can it run?