- EUR / USD remains near recent highs above the 1.2200 level.
- German manufacturing PMI did not meet estimates in May, eurozone PMI improves expectations.
The pair EUR/USD moves within a narrow range during the European session on Friday, consolidating near recent highs above the 1.2200 level.
EUR / USD is stable on Friday, moving within a 30 pip range between 1.2240 and 1.2210, amid mixed data from Germany and bullish on the eurozone in general.
In fact, Markit’s preliminary manufacturing PMI fell short of estimates for the month of May in Germany, reaching 64.0 points compared to the 65.9 expected and falling from the 66.2 in April. On the other hand, the PMI for services has risen to 52.8 points in Germany from the previous 49.9, surpassing the 52.0 expected by the market.
In the eurozone in general, the manufacturing PMI has surprised to the upside at 62.8 points versus the expected 62.5, although it has lost a bit of momentum from the previous reading of 62.9. The services PMI has risen more than four points, standing at 55.1 compared to the previous 50.0, improving the 52.3 forecast.
Having said that, 10-year German Bund yields navigate daily lows in the region of -0.12%, which puts the European currency under additional downward pressure.
Later, the European Commission will publish the preliminary result of consumer confidence for the current month.
On the other side of the Atlantic, Markit will also release its preliminary indicators for the manufacturing and service PMIs along with existing home sales data for the month of April.
What can we expect around the EUR?
EUR / USD found decent resistance in the 1.2250 region earlier in the week, extending the bounce from last week’s lows near 1.2050 and always supported by the strong rebound in 10-year German Bund yields and optimism. pervasive appetite for risk. The pair’s sustained rally also comes in response to investors’ shift towards better growth prospects in the Old Continent now that the vaccination campaign appears to have gained serious pace, along with strong fundamental data from the region.
Key events in the eurozone this week: Preliminary Consumer Confidence (Friday).
Eminent Background Issues: Asymmetric economic recovery in the region. Sustainability of the rebound in inflation figures. Progress in the vaccination campaign. Likely political turmoil around the EU Recovery Fund. German elections.
EUR / USD levels
At the time of writing, the EUR / USD pair is gaining 0.03% on the day, trading at 1.2230. The next resistance is at 1.2245 (May 19 high), followed by 1.2300 (round level) and 1.2349 (January 6 high). On the other hand, a break below 1.2051 (May 13 low), would target 1.1985 (May 5 low) en route to 1.1962 (200-day SMA).
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