The Euro pushes higher as risk appetite returns to the market and the Eurozone’s Services PMI rises as expected. Risk appetite and demand for high beta currencies is back as the British and German governments announced their intent to soften their Brexit negotiation demands in order to ease the path towards a soft Brexit deal. Adding to the positivity, the Eurozone’s Services PMI figure rose in August and printed at 54.4 which is on par with the market consensus. For the next coming weeks, the market will continue to be driven by any developments related to Brexit, trade tensions between the U.S and China, and the economic state of emerging markets. For today specifically, investors will also set their eyes on the ADP Non-farm Employment Change number from the U.S setting the stage for Friday’s long awaited NFP report.
The Euro rose after forming a double bottom at the 1.15820 support level which coincides with the 0.382 Fibonacci retracement. After the rejection of the support level, the pair was able to break all the three major moving averages signaling a possible shift in the trend of the pair. Adding to the bullish momentum, the 13-period moving average was also able to cross above the 50-period moving average and 200-period moving average simultaneously.
Support: 1.16605 1.17275
Resistance: 1.16164 1.15820