EURO : Mixed PMI

(Mon, 23 Nov 2020). A mixed set of PMI figures from France and Germany sees are fairly muted reaction in the Euro. To little surprise, the services sector took a significant hit given that the data covered the second lockdown. However, this was slightly above expectations, while IHS Markit noted that the latest contraction in activity was substantially slower than the previous lockdown, given that firms were able to better adapt to lockdown, thus less vulnerable to sharp falls in activity. French manufacturing sector slipped into contractionary territory, against expectations for a slight expansion of 50.1. Elsewhere, German PMI figures were broadly positive with both the manufacturing and composite reading surprising to the upside, thus the Euro and European indices have held steady.

EUR/USD, EUR/GBP LEVELS TO WATCH

EUR/USD: A narrow range thus far in the pair, although with a softer USD trend persisting, topside resistance is in focus at 1.1880-90 (last week’s highs). A break above opens the door to 1.1920. On the door, support is situated at 1.1815-20 where failure to hold puts the pair on course for a move towards 1.1750.

EUR/GBP: The cross firmly lower to kick off the week as markets digest UK press reports that PM Johnson prepares significant Brexit intervention as negotiators begin the final push. As such, the cross will remain headline focused throughout the week. That said, in the event of a deal, a move to 0.8700 is likely on the cards for the cross. Resistance sits at 0.8946 (200DMA)

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