As fears of a Deutsche Bank (DB, Financial) collapse eased, so did risk aversion, and the week started with majors looking somewhere else for direction. A bank holiday in Germany is keeping movements limited around the EUR/USD pair, which remains confined to a tight range around the 1.1200 figure, despite encouraging Markit manufacturing PMIs readings in Europe.
Data just released shows that German Manufacturing PMI rose to a three-month high of 54.3 in September, from August 53.6, although in line with preliminary readings. For the whole European Union, manufacturing came in at 52.6, in line with market's expectations, but indicating that growth accelerated at the end of the third quarter. Later today, the U.S. will release its ISM manufacturing PMI for the month, expected to have recovered to 50.3 from previous 49.4.
The EUR/USD pair remains lifeless but above the 1.1200 level, with a modest positive tone according to the 4 hours chart, as the price holds above its moving averages that anyway remain flat and all together in a tight range, while technical indicators head modestly higher around their mid-lines. Still, the pair lacks directional momentum, and the daily descendant trend line coming from this year high keeps capping the upside, today around 1.1260, while multiple intraday highs stand at 1.1280, the level to surpass to confirm a bullish extension up to 1.1330/40.
Below 1.1200 on the other hand, the pair can test the 1.1160 price zone, although seems unlikely the greenback will find enough demand if the positive mood persists into Wall Street.
View live chart of the EUR/USD
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