Euro Exchange Rates Today: EUR Higher but Outlook Remains Challenging

• The euro dollar exchange rate is 0.11 pct up on a day-to-day basis at 1.3604.
• The euro pound exchange rate is 0.4 pct higher at 0.8308.
• The euro Australian dollar exchange rate is 0.03 pct higher at 1.5197.
• The euro New Zealand dollar exchange rate is 0.1 pct higher at 1.6450.

(Note, the above are spot market quotes, your bank will affix a spread at their discretion. An independent FX provider will however guarantee to undercut your bank's offer, thus delivering more currency. Please find out more here).

Euro exchange rates have today benefited from PMI services readings that were flat-to-positive.

Markit's Eurozone Composite Purchasing Managers Index (PMI), which gauges how thousands of manufacturing and services companies fare every month, rose to 52.1 in December from 51.7 in November.

That was unchanged from a preliminary reading two weeks ago and was comfortably above the 50 threshold for growth.

Outlook for euro remains challenging

Despite the decent PMI readings the outlook for the euro is likely to remain challenging.

Luc Luyet at MIG Bank points out that technical indicators suggest further declines are likely for the headline euro dollar exchange rate:

"EUR/USD has broken the support at 1.3621. Coupled with the false breakout of the key resistance area between 1.3811 (11/12/2013 high) and 1.3832, a medium-term double-top is likely underway. The implied downside risk is at
1.3440. Supports stand at 1.3524 and 1.3490 (25/11/2013 low). The short-term technical structure is negative as long as prices remain below the resistance at 1.3677.

"In the longer term, the recent false breakout near the key resistance area defined by 1.3811 and the long-term declining trendline (around
1.3892) confirm a limited upside potential. We favour a corrective phase towards the 200 day moving average (around 1.3321)."

Ipek Ozkardeskaya at Swissquote Research is also bearish on the euro dollar exchange rate's outlook:

"EURUSD correction has deepened to 1.3587 as frustration with a lack of progress above 1.3800 forced a trimming of long positions.

"The sell-off has violated key fibo level at 1.3627 indicating further bearish momentum should be anticipated. Key test of the bears conviction will come near term at 1.3570 (uptrend support). Clearance would trigger an extension of downside to the 1.3300 region."

Meanwhile, the euro pound exchange rate enjoyed a relief rally owing to a below-par UK Services PMI reading.

However, the outlook for the euro pound exchange rate also remains challenged:

"With the MACD firmly below its zero line, there’s potential for extension of the bearish trend. Support is at 0.8253, a break below which would expose 0.8160. Resistance is at 0.8346," says a note from UBS.