EURO : Robust Manufacturing Sector

(Fri, 23 Oct 2020). The Euro and European bourses finding some support this morning following this morning’s PMIs. What has been quite evident from the PMI survey’s in both France and Germany is that the services sector has felt the weight of tighter restrictions, thus showing a contraction, while the manufacturing sector remained in expansion with Germany manufacturing at 58 beating the highest estimate of 57.6. The focus going forward with the divergence in sectors is how long it will last before the manufacturing sectors edges lower.

EUR/USD DRIVEN TO RICH LEVELS BY CHINESE YUAN

A factor behind the notable support for the Euro has been the Chinese Yuan going from strength to strength, as such, a slowing in the appreciation of the Yuan can be enough to curtail upside in the Euro. On the topside, prior support at 1.1830 is now resistance, where a firm break puts 1.1870-80 in focus, while offers also sit at 1.1900-15. Support resides at 1.1790-1.1800.

Option expiries: 1.1750-55 ($1.26bln), 1.1800 ($2bln), 1.1840-50 ($1.43bln)

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