EUR/USD refreshes weekly highs near 1.1850 on solid PMIs
|- DXY hits fresh five-week lows.
- French and German manufacturing PMIs surprise positively.
- Focus shifts to ECB minutes.
The EUR/USD pair brought an end to its consolidative mode and broke higher to test the psychological barrier of 1.1850, following the release of upbeat French and German manufacturing and services PMI reports. The pair was last seen changing hands at 1.1837, up +0.14% on the day.
EUR/USD trades above all major DMAs
The spot extends its reversal from the failed German coalition talks induced sell-off and sits at the best levels in almost a week, as a generalized weakness in the US dollar persists amid Fed’s inflation caution and downbeat US data. As a result, the spread between the 10-year and 2-year Treasury yields remains at the flattest levels in a decade.
Meanwhile, the latest leg higher in the major is mainly driven by fresh EUR buying on the back of a positive surprise delivered by the German and French manufacturing and services sectors, the preliminary figures showed.
- Germany Markit Manufacturing PMI above expectations (60.4) in November: Actual (62.5)
- France Markit Manufacturing PMI above expectations (55.9) in November: Actual (57.5)
Markets now await the Eurozone manufacturing and services PMI report due out shortly ahead of the ECB monetary policy meeting minutes for further upside.
EUR/USD Technical Levels
Karen Jones, Analyst at Commerzbank, explained: “EUR/USD is viewed as stable to positive while above the 20-day ma at 1.1691 we will continue to assume a near-term upside bias. The correction higher is capable of testing the recent high at 1.1880 and the 61.8% retracement at 1.1886. Above the 1.1858/1.1910 area (early August and October highs) lies the 1.1976/78.6% retracement then the 1.2092 September high.”
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