EURUSD continues higher for one more day after mixed economic data from the old continent. The European Monetary Union EMU) Manufacturing PMI came in at 51.7 in August matching the expectations. The Germany Manufacturing PMI registered in at 52.2 in August, below the forecasts of 53. Spain Manufacturing PMI came in at 49.9, below the forecasts of 52.8.
On the other hand, the France Manufacturing PMI registered in at 49.8, beating the estimates of 49 in August. Italy Manufacturing PMI reported at 53.1, above the expectations of 52.
Germany Unemployment Rate at 6.4%
Germany Unemployment Rate came in at 6.4% in line with markets forecasts, while the Unemployment Change came in at -9,000 below the estimates of 0.
German government revised its predictions from April that the economy would contract by 6.3% in 2020, and now expects a contraction of 5.8% For 2021 expects the economy to grow by 4.4% below the previous forecast of 5.2%.
The recent rally in EURUSD is still attributed to USD weakness after the shift in policy framework from the Fed, which announced that will let inflation climb higher and will focus on employment growth. Higher inflation and low-interest rates environment will continue to pressure the greenback.
EURUSD is at 1.1966 having hit earlier today the highest level since May 14, 2018. EURUSD is in strong uptrend and has gained over 12% since the March lows while the USD index (DXY) trades close to two-year lows. The picture is bullish for the pair, and a break above the 1.20 mark looks possible.
Resistance for the pair is at 1.1997 the daily high, while the next hurdle stands at 1.2079 the high from May 1, 2018. We have to go back to April 30, 2018 top, to find the next resistance level at 1.2138.
On the downside, initial support stands at 1.1934 the daily low. The next support area would be met at 1.1878 the low from yesterday’s trading session. More bids would emerge at 1.1810 the low from August 28.