EUR/USD moves above 1.1600 on upbeat PMIs

• EUR/USD trades closer to recent tops in the 1.1620 area.
• Germany, EMU flash PMIs surprised to the upside in July.
• Preliminary PMIs also due in the US docket along with housing data.

The single currency is extending the upside momentum further at the end of the week and pushes EUR/USD back to the 1.1600 region.

EUR/USD bolstered by data and risk appetite

EUR/USD has been posting gains uninterruptedly since last Friday, always in response to the increasing selling pressure hurting the greenback. Indeed, the ongoing favourable atmosphere surrounding the riskier assets has been sustained by auspicious news regarding a potential vaccine against the coronavirus and solid data releases on both sides of the ocean, lending wings to the idea that a strong recovery could be in the offing.

Supporting this, preliminary PMIs in core Euroland published earlier on Friday showed the manufacturing and services sectors in Germany, France and the broader euro region are all expected to have returned to the expansion territory this month.

Later in the NA session, Markit will also publish its flash PMI gauges seconded by June’s New Home Sales.

What to look for around EUR

EUR/USD advanced to levels last seen in October 2018 beyond 1.1600 the figure on Thursday, confirming once again the solid momentum of both the single currency and the rest of its risky peers. The sharp move up, while largely triggered by dollar-selling, has found extra sustain in auspicious results from the domestic docket, in turn supporting further the view of a strong economic recovery following the coronavirus fallout. Also lending wings to the momentum around the euro, the recently clinched deal on the European Recovery Fund helped putting political fears within the region to rest (for now).

EUR/USD levels to watch

At the moment, the pair is gaining 0.02% at 1.1598 and a breakout of 1.1626 (2020 high Jul.23) would target 1.1815 (monthly high Sep.24 2018) en route to 1.1852 (monthly high Jun.14 2018). On the downside, the next support aligns at 1.1495 (monthly high Mar.9) seconded by 1.1448 (50% Fibo of the 2017-2018 rally) and finally 1.1422 (monthly high Jun.10).