The euro has rallied against the US dollar for a third straight day. In the European session, is trading at 1.1338, up 0.50% on the day. The euro has gained 1.6% this week.
Eurozone, German PMIs Expected to Edge Higher
The eurozone and Germany will release services and manufacturing for May on Thursday. The markets are expecting a slight improvement, but the numbers are still likely to paint a gloomy economic picture.
Eurozone is expected to improve to 49.3 from 49.0 and to 50.3 from 50.1. Germany, the largest economy in the bloc, is also expected to post a slight improvement in manufacturing (48.9 from 48.4) and services (49.5 from 49.0).
The eurozone and Germany will release services and manufacturing PMIs on Thursday. The markets are expecting a slight improvement, but the numbers are still likely to paint a gloomy economic picture which would support further rate reductions. The ECB cut rates last month to 2.25% from 2.5%, its lowest level in over two years.
ECB Says Euro Rising Due to Riskiness of US Assets
The euro has been on a tear over the last few months. In April, when many of President Trump’s tariffs took effect, the euro soared as much as 7%, a result of the “sell US” wave in the financial markets in response to the stiff US tariffs.
President Christine Lagarde discussed the euro’s surge last week, saying that it was due to the “uncertainty and loss of confidence in US policies” in the financial markets and that Trump’s trade policies had weighed on eurozone growth and confidence.
In the US, it’s been a quiet data calendar but there’s been a host of members speaking. Many of the members have backed up Fed Chair Powell’s wait-and-see stance and determining rate moves based on the data.
EUR/USD Technical
EUR/USD has pushed above resistance 1.1307 and is testing resistance at 1.1331. Above, there is resistance at 1.1375
1.1263 and 1.1239 are the next support levels
