EUR/USD: Further upside likely on a break above 1.1150
- Broad USD bounce, cautious mood caps EUR/USD’s upside.
- Bleak Eurozone/US Manufacturing PMIs fail to move the pair.
- Eyes on US-China updates and risk trend amid a quiet docket.
EUR/USD is holding the lower ground above the 1.1100 level ahead of European trading, with the upside capped below 1.1150 amid a tepid bounce staged by the US dollar across its main competitors.
The greenback saw a revival of the buying interest after some energy got sapped out of the risk-on rally seen overnight, possibly due to the escalating US riots while markets remain jittery amid renewed US-China trade concerns. The US dollar index has bounced-off three-month lows of 97.75 to now trade at 97.90, up 0.06% on the day.
The US-China trade sentiment worsened on Monday after Bloomberg reported some sources, saying that the Chinese government officials have asked the state-run agro firms to halt purchases of some of the US products.
Meanwhile, the contraction in the Eurozone and German manufacturing sector extends and remains a drag on the euro’s upside. Across the Atlantic, the US ISM Manufacturing PMI also showed a bigger-than-expected contraction, with 43.1 in May. The bleak economic data out of both continents kept the spot in the familiar range above 1.1100.
Looking ahead, in absence of significant Eurozone/ US macro news, the major will continue to get influenced by the risk sentiment and USD flows. The EUR bulls will look for a sustained break above the 1.1150 barrier, in the wake of the optimism over European Union (EU) coronavirus recovery fund and more ECB bond-buying.
EUR/USD technical levels to watch
The immediate resistance awaits at 1.1150/53 (psychological level/ three-month tops), above which 1.1200 is on sight. On the flip side, the supports are aligned at 1.1111 (5-DMA) and 1.1095 (June 1 low).
EUR/USD additional levels