EUR/USD clings to mild gains around 1.0900, focus on German IFO data

EUR/USD sticks to mild gains near 1.0900 on the modest USD rebound.
A flash reading of Eurozone HCOB Composite PMI dropped to 47.0 in December vs. 47.6 prior, below the market consensus.
US S&P Global Composite PMI grew at the fastest pace in five months, rising to 51.0 in December vs. 50.7 prior.
Investors await the German IFO surveys due on Monday.

Lallalit Srijandorn FXStreet

The EUR/USD pair posts modest gains during the Asian trading hours on Monday. The major pair remains capped under 1.1000, the key barrier, and currently trades near 1.0900 amid the rebound of the US Dollar Index (DXY) and weaker Eurozone data. Investors will take more cues from the German IFO survey for fresh impetus on Monday.

The downturn in eurozone business activity surprisingly fell in December and indicated the bloc’s economy is almost certainly in recession. The preliminary Eurozone HCOB Composite PMI dropped to 47.0 in December from November’s print of 47.6, below the market consensus of 48.0. The figure registered the seventh consecutive month below the 50 level, separating growth from contraction.

Furthermore, the Eurozone Manufacturing PMI came in worse than expected, dropping to 44.2 in December, while the Services PMI fell to 48.1 from 48.7 in the previous reading, missing the estimation of 49.0. The data suggested that the Eurozone economy is likely to contract in the fourth quarter, contrary to the ECB's projections. This, in turn, exerts some selling pressure on the Euro (EUR) and acts as a headwind to the EUR/USD pair.

Across the pond, the US S&P Global Composite PMI grew at the fastest pace in five months, rising to 51.0 in December from 50.7 in the previous reading. Meanwhile, the Manufacturing PMI fell to the lowest level in four months, easing from 49.4 to 48.2 in December. The Services PMI rose to 51.3 in December from 50.8 in November.

On Sunday, Federal Reserve (Fed) Bank of Chicago President Austan Goolsbee stated that it’s too early to declare victory over the inflation battle, and the decisions on rate cuts will be dependent on economic data.

Moving on, the German IFO surveys will be released and are expected to show a modest improvement. Later this week, the Eurozone Harmonized Index of Consumer Prices (HICP) for November will be due on Tuesday, and the German Producer Price Index (PPI) will be released on Wednesday. On the US docket, the Census Bureau will release the housing data, including Building Permits and Housing Starts on Tuesday.

EUR/USD

Overview
Today last price	1.0897
Today Daily Change	0.0003
Today Daily Change %	0.03
Today daily open	1.0894

Trends
Daily SMA20	1.0878
Daily SMA50	1.0739
Daily SMA100	1.0755
Daily SMA200	1.083

Levels
Previous Daily High	1.1004
Previous Daily Low	1.0889
Previous Weekly High	1.1009
Previous Weekly Low	1.0742
Previous Monthly High	1.1017
Previous Monthly Low	1.0517
Daily Fibonacci 38.2%	1.0933
Daily Fibonacci 61.8%	1.096
Daily Pivot Point S1	1.0854
Daily Pivot Point S2	1.0814
Daily Pivot Point S3	1.0739
Daily Pivot Point R1	1.0969
Daily Pivot Point R2	1.1044
Daily Pivot Point R3	1.1084

Author

Lallalit Srijandorn

FXStreet

Lallalit Srijandorn is a Parisian at heart. She has lived in France since 2019 and now becomes a digital entrepreneur based in Paris and Bangkok.

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