The EUR/USD pair currency pair was able to reach a high of $1.1970 in yesterday’s trading session after a solid round of economic figures from the Eurozone showed the European economy maybe on its way back, after the devastating effects of the coronavirus.
The German Markit manufacturing PMI index jumped to 64.9 against analysts’ expectations for a figure of 63 and up from last month’s figures of 64.4.
The overall Eurozone PMI figures also beat expectations coming in at 63.1 against a market consensus of 62.1.
On the other side of the Atlantic however, from the US, the Markit services PMI figures came in at 64.8 and the market was expecting a figure of 70, while new home sales also unexpectedly fell as purchasers fretted over potential higher interest rates.
This has led to predictions that the US Federal Reserve may be currently overly upbeat about the state of the US economy and any thoughts they have of raising interest rates in the nearest future may be premature.
On the back of the conflicting news, the Euro was able to jump ahead, before basically giving up the gains and ending the day where it started as traders book in profits.
Others were worried about keeping long positions overnight with more confirmation needed on their part on the state of the European economy.
For this, all eyes will be on today’s release of the IFO business climate. index from Germany for further confirmation of an improving European economy.
As we can see on the chart, the 200 day moving average once against acted as a catalyst for strong resistance, and the Euro was quickly rejected at this level but the currency is expected to try and make another break past this point today.
This will depend on the figures released regarding the German IFO as well as the durable goods orders numbers from the US which are expected to come in significantly lower than last month.