The Eurozone PMI data for May, published yesterday, was disappointing. The Manufacturing PMI dropped from 49.0 to 48.4 (vs. expectations of 49.2), and the Services PMI declined from 50.1 to 48.9 (vs. forecast of 50.4). In addition, several European Central Bank members (Knot, Wunsch, Centeno) spoke in favor of a "timely" rate cut at the next meeting. These developments pushed the euro down by 47 pips.

On the other hand, the U.S. PMI data was strong:

• Manufacturing PMI came in at 52.3 (vs. 49.2 forecast and 50.2 in April)
• Services PMI rose from 50.8 to 52.3 (vs. forecast of 51.0)
• Initial jobless claims fell from 229K to 227K

Despite this, stock indices closed mixed (S&P 500 -0.04%), which forced the markets to pause and reassess. Thus, European developments alone are unlikely to change the current upward trend in the euro. Instead, this signals the need to watch equity markets more closely.

The euro only slightly pierced through the 1.1256 support level on the daily chart. The Marlin oscillator bounced off the boundary of the bullish territory, suggesting a technical correction for the euro. Today began with upward momentum, and Marlin is again attempting to break through the zero line from below. A white daily candle today could lay the groundwork for stronger bullish momentum next week. At this point, the market seems to have already factored in the rate cut expected in June.

Today, Germany's Q1 GDP will be released (forecast: +0.2% after a -0.2% drop in Q4). The U.S. will publish new home sales data for April, expected at 694K versus 724K in March. These figures could further support the euro's growth if they meet expectations.

On the four-hour chart, the price is rising steadily this morning after rebounding from the 1.1266 support level. The Marlin oscillator is returning to bullish territory, having generated a false bearish signal yesterday with its brief dip below the zero line.