- The pair remains sidelined at/above the 1.1600 handle.
- The greenback alternates gains with losses above 95.00.
- Final manufacturing PMIs due in Euroland. US markets are closed today.
The single currency seems to have recovered the smile at the beginning of the week and is now lifting EUR/USD to the area of session peaks around 1.1620.
EUR/USD looks to trade, Italy, EM
Spot has regained the bid tone on Monday following two consecutive sessions with losses, although finding decent contention in the 1.1600 neighbourhood for the time being.
Despite the positive note during the European morning, EUR should remain cautious after credit rating Fitch revised lower its outlook on Italy to negative from stable over the weekend.
In addition, the effervescence in the EM FX universe stays far from abated, while US-China trade concerns are poised to keep driving the global sentiment.
On another front, EUR speculative net shorts rose to 3-week highs in the week to August 28, as per the latest CFTC report.
In the data space, German final manufacturing PMI came in at 55.9 and the EMU’s gauge at 54.6 for the month of August.
EUR/USD levels to watch
At the moment, the pair is gaining 0.16% at 1.1623 and a break above 1.1734 (high Aug.28) would target 1.1745 (high Jul.31) en route to 1.1792 (high Jul.9). On the flip side, immediate contention emerges at 1.1617 (55-day SMA) followed by 1.1544 (21-day SMA) and then 1.1508 (low May 29).
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