Forex: EUR/USD quiet after testing 1.3150 for support

FXstreet.com (Barcelona) - After yesterday’s high at 1.3242, the EUR/USD became heavier and has been under profit taking process since then. It eventually lost the 1.3200 handle to move sideways at 1.3180 overnight, but today’s European morning sent the pair further down to test 1.3150 on the release of manufacturing PMIs in the euro area, which has held as support.

France has just sold 10-year bonds at an average yield of 1.81%, lowered from previous auction’s yield of 1.94%. The Italian 10-year debt yield is down at 3.84%, the lowest since October 2010.

The EMU PMI dropped slightly from 46.8 to 46.7, but analysts were expecting 46.5. The German figure eased from 49.0 to 48.3, instead of 47.9. The Italian number rose from 44.5 to 45.5, above 44.8 expected. The Spanish PMI came in higher, from 44.2 to 44.7 in April, beating 44.5 consensus. The Greek manufacturing figure rose from 42.1 to 45.

“Although the bias here is still bullish, my outlook is counter-trend, for a slide to 1.3120 support zone, followed by a break through 1.3050, en route to 1.2950 low”, wrote Deltastock.com analyst Stoyan Mihaylov, pointing to minor intraday resistance at 1.3190, followed by the peak at 1.3244 and the major hurdle on the daily time-frame at 1.3310-20.