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EUR/USD – Preliminary PMIs, Draghi speech eyed amid fresh NKorea tensions

EUR/USD – Preliminary PMIs, Draghi speech eyed amid fresh NKorea tensions

EUR/USD – Preliminary PMIs, Draghi speech eyed amid fresh NKorea tensions

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EUR/USD remained bid and jumped to a high of 1.1959 in Asia as the American dollar suffered losses on North Korea news.

Focus on preliminary PMIs

EUR’s appeal as a ‘growth currency’ would be strengthened further if the Eurozone and German preliminary manufacturing and services PMI numbers better estimates.

US-German 10-year yield spread poised for an upside break

A higher low pattern on the US-German 10-year yield spread chart indicates heightened odds of a break above 183 bps [Aug 15 high]. Such a move would strengthen the bid tone around the US dollar. Weak Eurozone PMI numbers could tilt yield spread in favor of the USD and could push down the EUR/USD spot to 1.1846 [triple top neckline support].

Draghi speech at 8:00 GMT

ECB President Draghi may try to jawbone the EUR. The ECB has been working hard of late to keep the EUR/USD pair below 1.20 levels.

EUR/USD Technical Levels

The trend line sloping upwards from June 23 low and Aug 17 low is likely to work as a resistance at 1.2006. A violation there would open up upside towards 1.2034 [September 20 high]. An end of the day close above 1.2034 would open doors for a sustained rally above 1.21 [psychological level].

On the downside, breach of support at 1.1940 [4-hour 100-MA] could yield a sell-off to 1.1872 [4-hour 200-MA] and 1.1846 [triple top neckline support]

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