Euro looks offered near 1.0830 ahead of key US data

• The Euro remains on the defensive against the US Dollar.
• European stocks trade with decent gains across the board.
• US ISM Services PMI takes centre stage in the docket.

The Euro (EUR) continues to face downward pressure against the US Dollar (USD), prompting EUR/USD to revisit the proximity of the 1.0800 region, where some decent contention seems to have emerged so far on Tuesday.

In contrast, the Greenback shows slight strength around 103.70 as per the USD Index (DXY), adding to the promising start of the week.

In terms of the wider economic context, the current stance on monetary policy remains unchanged, with investors contemplating potential interest rate cuts from both the Federal Reserve (Fed) and the European Central Bank (ECB) in the spring of 2024.

In the domestic docket, final Services PMI in Germany and the broader Eurozone surpassed the preliminary prints at 49.6 and 48.7, respectively, for the month of November.

Across the Atlantic, final S&P Global Services PMI is due in the first turn seconded by the key ISM Services PMI and the RCM/TIPP Economic Optimism Index.

Daily digest market movers: Euro puts the 1.0800 region to the test

• The EUR extends the bearish tone against the USD.
• US and German yields trade without a clear direction.
• Speculations of rate cuts by the Fed in March remain on the rise.
• Investors see the ECB trimming its interest rates in Q2 2024.
• The RBA left its policy rate unchanged, as expected.

Technical Analysis: Euro risks a deeper drop below 1.0800

EUR/USD faces further selling pressure and recedes to the 1.0800 neighbourhood.

If the EUR/USD continues to fall, it may come into contact with the key 200-day SMA around 1.0818 as a first point of support. The 55-day SMA around 1.0682 is expected to provide brief support in the case of a breach. If this level is also broken, the weekly low of 1.0495 (October 13) will be revealed, followed by the 2023 low of 1.0448 (October 3) and the psychological threshold of 1.0400.

If the EUR/USD continues to fall, it may encounter the initial point of support at the December low of 1.0804 (December 4,5). In the case of a breach, the 55-day SMA around 1.0684 is expected to provide temporary support ahead of the weekly low of 1.0495 (October 13), seconded by the 2023 low of 1.0448 (October 3) and the round milestone of 1.0400.

Meanwhile, the pair is expected to retain its positive view while keeping above the 200-day SMA, today at 1.0820.