EURUSD rises following the EU PMI reading

• EURUSD trades higher, surpassing 1.08000 level
   
• 7-day potential trading range: 1.06940 – 1.09110
   
• US jobless claims data may impact EURUSD volatility
   
• RSI has reached below lower boundary (<30 – oversold)

The EURUSD is trading higher, above the 1.08000 level, following the European PMI figures.

Both the German and Eurozone manufacturing PMIs came in higher than expected: 42.6 (vs. 40.8 - expected) and 45.9 (vs. 45.0 - expected) respectively.

Despite the better-than-expected result, the German PMI continues to point to a contraction in Europe's largest manufacturing sector.

The EURUSD is now experiencing a strong rally, with the potential to close above the key 1.08000 level.
 

According to the Bloomberg FX model, the potential (74.5% probability) 7-day EURUSD trading range is currently 1.06940 - 1.09110.

Investors are now looking forward to another important macroeconomic data due this afternoon - US initial jobless claims.

The markets are expecting 242K, up from 241K in the previous release. A significant deviation from the consensus may lead to higher volatility in the major currency pairs, including the EURUSD.

If higher than expected, the EURUSD may come under pressure, potentially limiting today's positive impetus for the EUR.

However, if lower than expected, we may see the most traded currency pair rise above the 1.08062 resistance level.

On the technical side...
 

The EURUSD is currently trading below all 3 major Simple Moving Averages (SMAs), indicating strong bearish momentum in both the medium and long term.

The Relative Strength Index (RSI) is just below the lower border (<30 - oversold; >70 - overbought), signaling a potential technical reversal.

On the upside, the 1.08000 level could be the first major target for the EUR bulls to close above by the end of the session. On the downside, 1.07753 could act as the key immediate resistance.

A break below this level could see the EURUSD move lower towards the 1.06677 level.