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Forex pairs in this Article » EUR/USD (Barcelona) - After entering Wednesday very overbought short-term, the EUR/USD is correcting lower following the release of disappointing Chinese economic data. The 1.3205 support level is giving way.

A weak Chinese PMI report was a perfect catalyst for correction in EUR/USD

For days, analysts have been noting the short-term extreme overbought readings in the euro and US Dollar futures as well as in the EUR/USD cross. Wednesday’s release of the weaker-than-expected HSBC Manufacturing PMI data gave traders the excuse they needed to book profits on long positions.

An overbought EUR/USD is finally correcting. Will it last?

With calls for a move up to 1.3417 eventually and a short-term correction potentially starting in EUR/USD, technicians are focusing on potential entry points for long positions. Initial support for EUR/USD below 1.3205 comes in at Tuesday’s low of 1.31627 with the 7/19 pivot low at 1.3065 as the key support below that. Shorter-term resistance for EUR/USD comes in at the Fibonacci projections of 1.3321 and 1.3364 with the key level of 1.3417 just above.
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