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EUR/USD is higher on Friday after the region’s set of flash preliminary Manufacturing Purchasing Managers’ Index (PMI) readings helped the pair reject a concerted break below 1.18 overnight. Economists at TD Securities expect the EUR/USD pair to remain generally rangebound for now.

Key quotes

“The October readings held their ground in firm expansion mode across the euro area. That said, the service sector slowed further into contraction territory overall. The big surprise was German manufacturing. This jumped sharply to 58.0 in October, providing some relief after August’s manufacturing data showed the first decline since the spring. Today’s releases show continued declines in employment, but at a decelerating rate.”

“Overall, as countries continue to restrict activity due to rising COVID-19 cases, the global goods sector continues its rebound (perhaps at a somewhat slower rate), while the services sector slides further into contraction territory as people spend less time outside of their homes.” 

“It is hard for us to get too excited for a meaningful break higher in EUR/USD near-term. Next week’s ECB meeting and the US vote soon after leave us expecting the pair to remain generally rangebound for now.”

“The pullback from 1.1880 this week has increased our conviction there and has us focused on support in the 1.1750/60 pivot zone as the next potential attractor lower for the pair.”