EUR/USD trades flat below 1.10 ahead of PMIs
|- EUR/USD navigates the 1.0990 region on Monday.
- The Greenback stays sidelined below 2019 tops.
- Final August manufacturing PMIs next on tap.
The shared currency is trading within a narrow range at the beginning of the week, taking EUR/USD to the 1.0990 region amidst marginal volatility due to the inactivity in US markets.
EUR/USD focused on data
The pair has managed to rebound from Friday’s yearly lows near 1.0960, although another test/surpass of the critical barrier at 1.10 the figure still remains elusive.
Renewed hopes of a potential trade deal between the US and China have supported the better tone in the risk-associated assets in detriment of the demand for safe havens in past sessions, triggering a rebound in US yields and therefore helping the buck to keep the rally well and sound for the time being.
Later in the session, final manufacturing PMIs in the euro zone are unlikely to be a market mover, while the main focus of attention remains on developments from the US-China protracted trade conflict.
What to look for around EUR
Spot remains on the defensive amidst the better tone in the buck and somewhat renewed optimism on the US-China trade front. Recent poor prints from the domestic docket have added extra downside pressure to the single currency and strengthened further the need for ECB stimulus, likely to be delivered at this month’s meeting. This view is also expected to keep occasional bullish attempts well contained for the time being. On the political front, positive developments from Italy have been utterly ignored by investors so far.
EUR/USD levels to watch
At the moment, the pair is up 0.01% at 1.0988 and a breakout of 1.1069 (10-day SMA) would target 1.1117 (21-day SMA) en route to 1.1163 (high Aug.26). On the flip side, immediate contention emerges at 1.0963 (2019 low Aug.30) seconded by 1.0839 (monthly low May 11 2017) and finally 1.0569 (monthly low Apr.10 2017).
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