- EUR/USD fades Thursday’s pullback and regains 1.1850.
- German, EMU advanced manufacturing PMIs surprised to the upside.
- US flash manufacturing/services PMI next on tap in the calendar.
The single currency regains the smile at the end of the week and pushes EUR/USD back to the mid-1.1800s, or new daily highs.
EUR/USD meets support near 1.1790
Following Thursday’s moderate pullback, EUR/USD resumes the upside on Friday and manages to re-visit the mid-1.1800s in response to better-than-expected flash prints from PMIs.
In fact, advanced manufacturing PMIs in Euroland and Germany came in above estimates for the current month at 54.4 and 58.0, respectively, alleviating some concerns over the impact of the second wave of the coronavirus pandemic on the incipient recovery in the region.
On the other hand, the greenback found extra legs after an extra stimulus bill is unlikely to be discussed further before the presidential elections in November, as per latest comments by House Speaker Nancy Pelosi.
In the US docket, Markit will also release its flash manufacturing and services gauges later in the NA session.
What to look for around EUR
EUR/USD fades Thursday’s retracement and regains the positive momentum well above 1.1800 the figure. The outlook on EUR/USD remains positive and bearish moves are deemed as corrective only. Further out, the positive bias in the euro remains underpinned by auspicious results from domestic fundamentals (despite momentum appears somewhat mitigated in several regions), the so far cautious stance from the ECB and the solid position of the EMU’s current account. In addition, the probable “blue wave” following the US elections is deemed as a negative driver for the greenback and carries the potential to lend extra legs to the pair in the longer run.
EUR/USD levels to watch
At the moment, the pair is gaining 0.18% at 1.1839 and a breakout of 1.1880 (monthly high Oct.21) would target 1.1917 (high Sep.10) en route to 1.1965 (monthly high Aug.18). On the flip side, the next support emerges at 1.1688 (monthly low Oct.15) followed by 1.1612 (monthly low Sep.25) and finally 1.1495 (monthly high Mar.9).
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