US DOLLAR OUTLOOK: EUR/USD STRENGTH STALLS FOLLOWING LATEST PMI REPORT
- EUR/USD price action advancing as Bund to Treasury yield spreads turn higher
- US Dollar under pressure despite better-than-expected PMI data just released
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Markets are digesting the latest round of monthly PMI data just released by IHS Markit. EUR/USD price action has been trading on its front foot for most of the session with a broadly stronger Euro piggybacking on a softer US Dollar. Eurozone PMIs topped consensus forecast led by a record expansion in manufacturing output and the first sign of growth in the services sector since August last year.
EUR/USD PRICE CHART: 15-MINUTE TIME FRAME (22 APR TO 23 APR 2021)
Also, with EU covid lockdowns easing ahead, outlook for the Euro-area seems encouraging and is likely contributing to the recent influx of EUR/USD strength. US PMI data crossed market wires better-than-expected as well, but it seems as though traders have priced the Greenback for perfection, hence the overall muted response by USD bulls. Not to mention, ten-year Bund to Treasury yield spreads have been edging higher and arguably underpins Euro gains against its US Dollar peer.
| Change in | Longs | Shorts | OI |
| Daily | -27% | 12% | -3% |
| Weekly | -8% | 2% | -1% |
-- Written by Rich Dvorak, Analyst for DailyFX.com
Connect with @RichDvorakFX on Twitter for real-time market insight
