Euro exchange rate outlook for today: EUR/USD recovers but bias remains to the downside

The euro dollar exchange rate is 0.18 pct up on Friday night's closing level at 1.59666.
The euro pound exchange rate is 0.09 pct lower at 0.8464.
The euro Australian dollar exchange rate is 0.54 pct lower at 1.4347.

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Strong PMI data helps euro rates today, but bias remains negative

Euro rates have today found support from broadly supportive PMI data.

The important German Markit Manufacturing PMI (Oct) came in at 51.7, ahead of expectations for 51.5.

The composite Eurozone Manufacturing PMI came in at 51.3 - inline with expectations.

"Supportive PMI gave a boost to EUR-bulls in the morning sending EURUSD above 1.3500, yet the bias remains strongly on the downside. The pair spiked down to 1.3442 in Asia (lowest since Sep 18th) and the MACD 12, 26 day indicator shows solid bearish momentum. Option bets are mixed at about 1.3500, with offers seen at 1.3565. On the downside, stops trail below 1.3420 – Fibonacci 38.20% level on Jul – Oct rally," says Ipek Ozkardeskaya.

Another factor to take into account when calling the euro's outlook is, of course, the strength of the US dollar.

We hear from Boris Schlossberg at BK Asset Management that this week could well see a return to strength for the US dollar.

Also confirming the pro-dollar outlook are UniCredit Bank:

"The confirmation of the final PMI reading for the eurozone today at 51.3 is unlikely to change the recently developed negative picture for the EUR.

"Momentum has waned significantly and US yields have risen by 10bp in three days, providing further tailwinds for the US dollar."

So while the euro is enjoying a relief rally on Monday morning we must keep in mind the potential for further declines. Is this a good selling opportunity?