EUR/USD: Will it sustain the bounce ahead of EZ PMIs?

The EUR/USD pair extends its range-trade on 1.11 handle into a fourth day today, with a break on either side eagerly awaited, as investors gear up for the first major economic release of the week – Euro zone flash manufacturing and services PMI reports.

EUR/USD ignores risk-recovery

The main currency pair found buyers once again near 1.1140 levels in early Asia, and attempted a fresh bounce over the last hour, in another run to regain the key support-turned resistance of 1.1160 levels.

However, the bulls are seen struggling to extend the break higher, as Treasury yields across the curve are seen regaining ground, which could provide the much-need impetus to the USD bulls.

Moreover, a slight turnaround in risk conditions amid a technical bounce seen in oil prices and higher Asian equities, could also keep the recovery mode capped in the funding currency Euro.

The Asian markets cheer some optimism derived from the UK May’s offer to the EU citizens at the Brussels Summit, while a version of a healthcare plan released by the US Senate late-Thursday, also add to the risk recovery.

All eyes now remain on a flurry of manufacturing and services PMIs due to be reported from across the Euro area economies, while the US PMIs and new homes sales data, followed by the FOMC member Powell will wrap a data-light week.

EUR/USD Technical Levels

Franco Shao at ForexCycle explains: “EURUSD moved sideways in the bottom of the trading range between 1.1109 and 1.1295. A clear break below 1.1109 support will indicate that the uptrend from 1.0569 (Apr 10 low) had completed at 1.1295 already, then the pair will find the next support level at around 1.0800.”

“On the upside, as long as 1.1109 support holds, the fall from 1.1295 could be treated as consolidation of the uptrend, one more rise towards 1.1450 is still possible after the consolidation,” Franco adds.