- Offered into US-China trade truce, as the US rates, dollar get a boost.
- A split on the EU top jobs also weighs ahead of Eurozone/ US PMIs.
The EUR/USD pair remains under pressure around the midpoint of the 1.13 handle amid a rally in the US Treasury yields and a lack of consensus om the EU top jobs, as we progress towards the European opening bells.
Focus on Brussels’ top jobs outcome, Eurozone PMIs
The main currency pair is seen testing the recent support area just under the 113.50 level, as the bears fight back control following the last two days of tug of war between them and the bulls. The selling pressure can be mainly attributed to a broad-based US dollar strength fuelled by the rally in the Treasury yields after the US and China reached a trade truce and eased trade war fears.
Adding to the weight on the shared currency, the European Union (EU) leaders failed to reach a consensus over who should get the EU’s top jobs, including a successor to Commission chief Jean-Claude Juncker. Summit chair Donald Tusk decided to have a break for bilateral talks, and his spokesman said the summit would resume later at breakfast on Monday. Meanwhile, the French President Macro said on Sunday the new Chief for the European Central Bank (ECB) could be decided later this week.
In the meantime, the immediate focus now remains on the Euro area final manufacturing PMI reports due later today for fresh insights on the health of the Euro area economy, especially after the flash readings suggest a minor improvement in the manufacturing sector. Also, the US ISM manufacturing PMI data will be closely eyed for fresh dollar trades, in the face of the aggressive rate cut calls scaled back by the Fed last week.
Levels to watch
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