German manufacturing PMI hit 53.2 points, well above 51.7 expected. Despite a miss in services and weak French figures, the euro gets another shot in the arm.
EUR/USD is on high ground, below resistance.
Earlier, French manufacturing PMI couldn’t top the 50 point mark separating growth and contraction. It slid from 49.6 in July to 48.6 points in the preliminary read for August.
We also got an update on the German consumer: The GfK consumer climate slipped from 10.1 to 9.9, below expectations.
The pair rallied quite nicely on the weakness of the US dollar following the FOMC minutes. In addition, flows came into the euro as it has become a funding currency. The same happened with the yen.
The “risk off” atmosphere was also fueled by the worse than expected PMI read in China. Worries about the world’s second largest economy have also been weighing on sentiment, eventually aiding the euro.
More: EUR/USD: H&S Bottom; – Nomura
So far, this rally resulted in the pair reaching resistance at 1.1290. Here is how this looks in the chart:
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