EURUSD Bounces Off Support on Firm Data and Softer Brexit Hopes
EUR Analysis and Talking Points
- EURUSD Bounces Off 1.12
- Brexit Moving in a Softer Direction
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EURUSD Bounces Off 1.12
The Euro and German yields had been underpinned this morning by a slew of better than expected services PMI figures from the Eurozone. Consequently, this has eased some concerns that the weakness in the manufacturing sector is spreading to the whole economy, given the pick up in the services data. However, while the manufacturing sector remains weak the upside in the Euro remains somewhat limited, as such, any sizeable move to the upside should be treated with caution. Risks to the Euro-Area continue to remain tilted to the downside, while CFTC data continues to show that investors remain bearish on the Euro with net shorts valued at over $11bln.
Brexit Moving in a Softer Direction
The increasing hope that Brexit is moving in a softer direction has been among the supportive factors behind the Euro this morning. Yesterday saw PM May reach out to the Labour leader Jeremy Corbyn in order to find a Brexit compromise, while also seeking an agreement with the EU on an extension to Article 50. While political uncertainty over Brexit remains high, there is a growing sense that the approach is moving to a softer direction.
EURUSD PRICE CHART: Daily Time Frame (Dec 2018 – Apr 2019)
Eurozone Debt Crisis: How to Trade Future Disasters – Martin Essex, MSTA, Analyst and Editor
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--- Written by Justin McQueen, Market Analyst
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.