EUR/USD pares its decline in a slight nudge higher from 1.1804 to 1.1819
The German economy is keeping more resilient in the wake of the second virus wave in Europe, as the manufacturing sector is doing the heavy lifting – helped by export demand – in limiting the downturn that is starting to be seen in the services sector.
The headline manufacturing print is giving the euro a bit of a reason to start moving on the day after having traded more tepidly around 1.1800 against the dollar earlier.
While a 15 pips move isn’t much, just be aware that the nudge higher is seeing buyers start to challenge the 100-hour MA (red line) @ 1.1814.
Keep above that and the near-term bias will turn more bullish instead.
There is also some near-term resistance closer towards 1.1835 before getting towards the highs seen earlier this week nearer to 1.1867-81.
I wouldn’t get too carried away by the positive release, as a worsening virus situation still has the potential to temper with the mood in the manufacturing sector – especially if tighter restrictions are to be called upon in Germany.
It is hard to see how just one bright spot will be able to overwhelm the negative tide moving forward. But for now though, the market is seeing this as a relieving sign after the constant bad news on the virus situation over the past few weeks.
The DAX is also up by around 0.8% on the back of the release: