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  • Broad USD bounce, cautious mood caps EUR/USD’s upside.
  • Bleak Eurozone/US Manufacturing PMIs fail to move the pair.
  • Eyes on US-China updates and risk trend amid a quiet docket.

EUR/USD is holding the lower ground above the 1.1100 level ahead of European trading, with the upside capped below 1.1150 amid a tepid bounce staged by the US dollar across its main competitors.

The greenback saw a revival of the buying interest after some energy got sapped out of the risk-on rally seen overnight, possibly due to the escalating US riots while markets remain jittery amid renewed US-China trade concerns. The US dollar index has bounced-off three-month lows of 97.75 to now trade at 97.90, up 0.06% on the day.

The US-China trade sentiment worsened on Monday after Bloomberg reported some sources, saying that the Chinese government officials have asked the state-run agro firms to halt purchases of some of the US products.

Meanwhile, the contraction in the Eurozone and German manufacturing sector extends and remains a drag on the euro’s upside. Across the Atlantic, the US ISM Manufacturing PMI also showed a bigger-than-expected contraction, with 43.1 in May. The bleak economic data out of both continents kept the spot in the familiar range above 1.1100.

Looking ahead, in the absence of significant Eurozone/ US macro news, the major will continue to get influenced by the risk sentiment and USD flows. The EUR bulls will look for a sustained break above the 1.1150 barrier, in the wake of the optimism over the European Union (EU) coronavirus recovery fund and more ECB bond-buying.

EUR/USD technical levels to watch

The immediate resistance awaits at 1.1150/53 (psychological level/ three-month tops), above which 1.1200 is on sight. On the flip side, the supports are aligned at 1.1111 (5-DMA)   and 1.1095 (June 1 low).

EUR/USD additional levels