- EUR/USD leaves behind Friday’s pullback and approaches 1.19.
- The dollar remains on the defensive and adds to the bid bias in spot.
- US, EMU PMIs, US ISM Manufacturing in the limelight later in the session.
The recent rebound in EUR/USD from lows in the mid-1.1700s recorded in late July seems to have met quite a moderate resistance in the area past the 1.1900 yardstick so far.
The buying pressure surrounding the pair, in the meantime, does not give any hint of exhaustion and remains underpinned by the investors’ preference for the riskier assets, all against the backdrop of some lack of upside traction in the dollar.
The upbeat mood in the risk complex on Monday comes despite signs that the recovery in the Chinese economy could be running out of steam, as per another downtick in the manufacturing PMI in that country during the month of July.
Later in the session, market participants are expected to closely follow the release of the ISM Manufacturing across the pond, while final July PMIs in the euro area should not surprise anybody.
Short-term Outlook
Immediate and interim resistance for the pair comes in at the July’s peak near 1.1910 recorded on Friday. The surpass of this level should open the door to extra gains to, initially, the late-June tops around 1.1975. Above this area, the selling pressure is expected to mitigate. Reinforcing the latter emerges a Fibo level and the 50- and 100-day SMAs. Further north comes in the psychological 1.2000 mark, where also sits the critical 200-day SMA.
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