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EUR/USD Price Forecast – EUR/USD Holds Fort at 1.16 Ahead of Euro Zone PMI

The Euro is shifting towards the week’s highs as the Dollar takes a breather. The EUR/USD is trading close to Thursday’s close heading into Friday’s European market session, which brings a dose of mid-tier PMI figures due early to kick off the week’s end. The Euro managed to reverse the early week’s losses against the US Dollar, lifting back towards Tuesday’s highs near 1.1633. The Greenback walked back on Thursday as Treasury yields declined for the trading day, taking the USD to the downside alongside them. From the lows, EUR/USD rose more than a hundred pips and peaked at 1.1632. It pulled back finding support above 1.1600.

EURUSD Holds On

The DXY hit a 1-year high but it was again rejected from above 95.00 and is about to end lower, far from the high. The move lower from the top could signal that short-term top is in place that could lead to corrective moves, supporting the recovery of EUR/USD. Asian shares slid to their lowest in six months on Friday, on signs U.S. trade battles with China and many other countries are starting to chip away at corporate profits. Asian shares slid to their lowest in six months on Friday, on signs U.S. trade battles with China and many other countries are starting to chip away at corporate profits. Worsening sentiment pushed U.S. bond yields lower and triggered profit-taking in the dollar. The 10-year U.S. Treasuries yield fell to 2.91% from Thursday’s high of 2.95% and its three-week high of 3.01% touched on Wednesday last week.

EURUSD Hourly
EURUSD Hourly

In addition, the Italian government’s appointment on Thursday of two eurosceptic to head key finance committees reignited worries about anti-euro voices in the euro zone’s third-largest economy which prevented common currency from capitalizing on US dollar’s weakness thereby capping Euro’s momentum below 1.1650 handle. Friday sees Markit PMIs for the Eurozone starting off with France with the Markit Composite PMI expected to come in at 54.2, in line with the previous figure. The important measures for the day will be German and EU-wide PMIs, with the German Markit Composite PMI forecast 53.4, previous 53.4, while the EU’s PMI Composite is expected to tick downwards slightly, forecast to come in at 53.9 versus the previous reading of 54.1. Next week will be bringing the next round of Consumer Price Index (CPI) figures for the European Union, and Euro traders will be looking forward to the reading, which last printed at 1.9% in April. Expected support and resistance for the pair are at 1.1550 / 1.1510 and 1.1645 / 1.1680 respectively.

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This article was originally posted on FX Empire

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