EUR/USD faces resistance just above 1.1300, PMIs on sight
- EUR/USD lost some upside momentum above 1.1300.
- USD-weakness has sustained the strong rebound.
- June Flash PMIs next of relevance in Euroland.
The upbeat sentiment around the single currency remains well in place at the end of the week, although EUR/USD seems to have met a tough hurdle in levels just above 1.1300 the figure.
EUR/USD looks to data, USD
Spot is clinging to the positive territory and is looking to advance for the third consecutive session on Friday, always around the key 1.1300 barrier and supported by the recent negative price action in the buck.
The strong rebound in the pair from as low as the 1.1180 region (Tuesday) has been boosted by the dovish message from the FOMC event on Wednesday and the subsequent and quick unwind of long positions in the greenback.
The inability of extending the up move further north of the 1.1300 mark on a more sustainable fashion carries the potential to spark some near term consolidation and the likely return of sellers to the market.
Today’s domestic docket will include the advanced gauges of manufacturing and services PMIs in core Euroland for the current month, with the focus of attention on any hint of a probable recovery in the fundamentals of the bloc. Across the ocean, flash manufacturing and services PMI are due along with housing sector data and Fedspeak.
What to look for around EUR
The renewed dovish stance from the ECB and USD-dynamics appear to be dictating the price action around the European currency for the time being, relegating to a secondary role the broad risk-appetite trends and trade tensions. Furthermore, the slowdown in the region looks unremitting and reinforces at the same time the current dovish attitude of the central bank. On the political front, Italian politics is expected to remain a source of uncertainty and volatility for EUR, with the centre of the debate gyrating around the country’s opposition to EU fiscal rules as well as the challenging tone from LN’s M.Salvini.
EUR/USD levels to watch
At the moment, the pair is receding 0.04% at 1.1287 and faces the next support at 1.1181 (low Jun.18) seconded by 1.1176 (monthly low Mar.7) and finally 1.1115 (low May 30). On the upside, a surpass of 1.1347 (high Jun.7) would target 1.1351 (200-day SMA) en route to 1.1448 (monthly high Mar.20).