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EURUSD Bounces Off Support on Firm Data and Softer Brexit Hopes

EURUSD Bounces Off Support on Firm Data and Softer Brexit Hopes

Justin McQueen, Strategist

EUR Analysis and Talking Points

  • EURUSD Bounces Off 1.12
  • Brexit Moving in a Softer Direction

For more in-depth analysis on EUR, read the brand new Q1 2019 FX forecast guides

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.

EURUSD Bounces Off Support on Firm Data and Softer Brexit Hopes

Source: DailyFX

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)

EURUSD Bounces Off Support on Firm Data and Softer Brexit Hopes

IG Client Sentiment

EURUSD Bounces Off Support on Firm Data and Softer Brexit Hopes

Source: DailyFX

Recommended Reading

Eurozone Debt Crisis: How to Trade Future Disasters – Martin Essex, MSTA, Analyst and Editor

Chart by IG

KEY TRADING RESOURCES:

--- Written by Justin McQueen, Market Analyst

To contact Justin, email him at Justin.mcqueen@ig.com

Follow Justin on Twitter @JMcQueenFX

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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