Euro bounces after PMI data, kiwi extends drop

The euro rebounded against the U.S. dollar in mid-session after European PMI manufacturing and services rose more than forecast in June, while concerns eased over the future of economic growth in the euro zone.

Pressure might be evident later in the session as traders anticipate further sanction against Russia, Europe’s largest trading partner, following the latest developments in eastern Ukraine and crash of the Malaysian airplane last week.

The euro may hit an eight-month low of $1.3437 earlier today, hurt by fears of further sanctions on Russia amid the continuing geopolitical tensions in EAstern Ukraaine, which will have a negative impact on the progress of the recovery of economies in the euro area in particular.

As of 14:39 pm GMT +3, the EUR/USD traded around 1.3470 levels hitting a session high at 1.3483 and lowest at 1.3436 compared to the opening level of 1.3461.

Technically, the pair continues to trend towards the target at 1.3375 represented by the 50% correction at 1.3375. The possibility of the downward trend remains intact, and the Linear Regression Indicators supports this possibility, especially with the continued trading below 1.3520 levels.

The Zealand dollar paced deepr against the U.S. dollar downward, after remarks by Central Bank Governor of New Zealand Graeme Wheeler, who signaled the kiwi is not stable and at inappropriate current levels.

Mr. Wheeler plans to leave monetary policy unchanged in the coming period after the recent interest rate hikes to 3.50% and to 3.25% before, making the central bank the first to do so amid recent improvement in emerging economies.

The NZD/USD   was trading around 0.8590 levels, after hitting a high of 0.8694 and a low of 0.8566 compared to the opening price at 0.8649.

On the other hand, the British pound extended losses against greenback falling for the seventh day on the impact of slower retail sales over the past month, which was worse than expected, falling by 4.0% compared with the previous revised 4.5%, pointing to the weakness in consumer spending levels.

The GBP/USD was trading around 1.7011 levels, recording the highest at 1.7051 and lowest at 1.7004 compared to the opening price of 1.7039.

Technically, a break and stability below 1.7035 is negative, while the upward trend has become required to return stability above 1.7080. The negative scenario remains possible. But the breach of 1.6995 is necessary to prove the extension of downside move.

The U.S. dollar held firm around the highest level in five weeks, boosted by anticipation for the U.S. employment and housing data, which is expected to show jobless claims over the past week stood about the levels of 300 thousand applications, with expectations of lower home sales to 475 thousand from 504 thousand.

The USDIX was trading around 80.86 recording the highest at 80.97 and lowest at 80.81 compared to the opening price of 80.89.