Wouldn't panic yet, looks like a pullback then further move towards the upside later this week

EURUSD falls further and tests lows near 1.1320 ahead of PMIs, ISM

• EUR/USD drops to session lows in the 1.1320 region.
• Final May PMIs, German jobs are due later in Euroland.
• US ISM manufacturing next of relevant in the NA session.

The single currency remains on the back foot at the beginning of the week and is now dragging EUR/USD to test multi-day lows in the 1.1320 area.

EUR/USD looks to trade, data

The pair broke below last week’s consolidative theme and in doing so it has also breached the critical support area around 1.1350, where emerges the 200-day SMA.

The recently clinched US-China trade truce is sustaining the better tone in the risk-associated complex, pushing US yields higher and helping the buck to extend the rebound. In fact, rising US yields have widened the spread vs. their German peers, favouring the decline of the pair.

Despite the US-China truce appears to be just a temporary relief, it looks sufficient to cool down speculations of a Fed’s move lower on rates along with fears of a global slowdown, all morphing into accelerated outflows from safe havens and a firm note around the buck.

Later in the session, German labour market figures are due along with final manufacturing PMIs for the month of May and some ECB gauges. In the US calendar, all the attention will be on the ISM manufacturing.

What to look for around EUR

The renewed dovish stance from the ECB and USD-dynamics should dictate the price action around the pair in the near term, helped at the same time by the broad risk-appetite trends and the recent positive developments from the US-China trade front. Further out, the slowdown in the region looks unremitting and reinforces at the same time the current dovish attitude of the central bank. On the political front, Italian politics is expected to remain a source of uncertainty and volatility for EUR, with the centre of the debate always gyrating around the country’s opposition to EU fiscal rules.

EUR/USD levels to watch

At the moment, the pair is retreating 0.32% at 1.1330 and faces the next down barrier at 1.1321 (low Jul.1) followed by 1.1260 (100-day SMA) and finally 1.1181 (low Jun.18). On the flip side, a break above 1.1412 (high Jun.25) would target 1.1419 (high Feb.28) en route to 1.1448 (monthly high Mar.20).

Sources: https://forex-station.com (Chart) & https://www.fxstreet.com/news/eur-usd-f ... 1907010659 (Article)