EUR/USD Rebounds as US PMI Weakens Dollar, Boosting Euro

EUR/USD staged a notable recovery on Thursday after weaker US Purchasing Managers’ Index (PMI) data renewed selling pressure on the US Dollar. After sliding in Asian and early European hours, EUR/USD turned higher following the 9:45 AM EST PMI release. The pair gained roughly 0.8% within two hours, moving from around 1.0825 to 1.0905. Trading activity also confirmed the breakout: volume rose to about 150% of the 30-day average, helping the euro clear multiple resistance levels. US PMI details drove the repricing. Manufacturing PMI came in at 48.7 (third straight month in contraction), while services PMI was 52.1 versus an expected 53.5. Market participants adjusted Federal Reserve rate expectations, with analysts citing potential delays to previously assumed hikes and support for a more cautious Fed path. Technically, EUR/USD is now focused on key levels: immediate resistance near 1.0920 (prior week high), wider resistance around 1.0950 (200-day moving average), support near 1.0850/1.0800 (psychological and March low area). Momentum improved as RSI rose from about 45 to 58 and moving-average gaps narrowed. Eurozone data provided a secondary tailwind. Reports cited German factory orders up 2.3% m/m and slightly improved French business confidence, supporting relative growth expectations versus the US. Looking ahead, traders are likely to watch US non-farm payrolls and upcoming Eurozone inflation for the next direction signal. Overall, the move suggests the dollar is the main driver of the EUR/USD shift, with short-term follow-through dependent on whether gains hold above resistance.