EUR/USD moves to daily highs beyond 1.1080

• EUR/USD picks up pace on Friday and tests 1.1086.
• German November flash manufacturing PMI came in at 45.7.
• C.Lagarde said the ECB remains vigilant on its policies.

The shared currency has regained some poise at the end of the week and is now lifting EUR/USD to the area of daily highs in the 1.1075/80 band.

EUR/USD up on weaker dollar, PMIs

After two consecutive daily pullbacks, the pair is now regaining some upside traction on the back of the offered bias surrounding the buck and somewhat positive readings from the initial estimates of PMIs in core Euroland.

In fact, EUR stays bid after French and German flash manufacturing PMIs for the current months came in above estimates, although in the German case, it is still well into the contraction territory. Of note, however, is the downtrend in the Services sector despite they both remain above the 50.0 threshold.

In the meantime, all continues to gyrate around the US-China trade negotiations (or the absence of them) after President Trump recently threatened to impose even higher tariffs.

On another front, and at her speech today, ECB’s C.Lagarde said the region would benefit if other policies step in to help, while she stressed that the bank’s monetary policy will continue to sustain the economy and that the ECB keeps monitoring its policies.

Later in the session, US advanced manufacturing and services PMIs are due seconded by the final print of the U-Mich index.

What to look for around EUR

Spot met strong resistance in the 1.1080/90 band for the time being while it keeps looking to USD-dynamics and headlines from the US-China trade front for direction. On the macro view, the outlook in Euroland remains fragile and does nothing but justify the ‘looser for longer’ monetary stance by the ECB and the bearish view on the single currency in the medium term at least. In this regard. Recent manufacturing PMIs appear to have bottomed out, although the deterioration in the services sector seems to have further room to extend.

EUR/USD levels to watch

At the moment, the pair is gaining 0.01% at 1.1072 and faces the next hurdle at 1.1097 (monthly high Nov.21) followed by 1.1173 (200-day SMA) and finally 1.1179 (monthly high Oct.21). On the downside, a break below 1.0989 (monthly low Nov.14) would target 1.0925 (low Sep.3) en route to 1.0879 (2019 low Oct.1).