EURUSD plummets toward 1.1400 after weaker German PMI data

The EUR/USD currency pair is currently experiencing a significant sell-off, declining decisively toward the critical 1.1400 support level. This sharp decline is partly attributable to the renewed strength of the US dollar across global currency markets. The dollar rally accelerated following market expectations that the Federal Reserve will raise the federal funds rate later this year, especially after the hawkish remarks from new Chair Kevin Warsh last week.

Euro extends decline following the weak German PMI

The currency pair extended its decline in response to weak German PMI data. Preliminary readings indicate that private sector activity in Germany contracted at its fastest pace since 2024. Germany reported disappointing HCOB manufacturing and services PMI figures, while the Eurozone delivered mixed PMI results. Specifically, the German preliminary manufacturing PMI dropped to 50.0 in June, below the expected 50.5. The Services PMI also fell to 46.8, down from 48.1 in the previous month.

Conversely, Eurozone business activity showed resilience in June despite firms raising prices. The Eurozone services PMI improved to 48.9, marking its highest level in three months. Meanwhile, the manufacturing PMI slightly declined to 51.3 in June from 51.6 in May, just below market expectations of 51.6.

Looking ahead, key Eurozone economic data to monitor this week includes the German IFO business climate report due Wednesday, as well as comments from ECB policymakers. However, the sustainability of any recovery in the EUR/USD pair will largely depend on the performance of the US dollar.

EURUSD Technical Outlook

From a technical point of view, the trend in the EUR/USD is clearly bearish. In the short term, if bearish momentum persists, the 1.1400 level remains a critical support zone to watch. If this support fails, the decline is likely to extend toward the 1.1370–1.1350 range. The price action in this area will be pivotal in determining the pair’s next direction. If buyers defend this zone and generate a recovery pattern, a rebound toward the 1.1460 and 1.1500 levels is probable.

 

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