EUR/USD ready to run beyond 1.20

The EUR/USD pair is trading near the psychological 1.20 level this Tuesday, amid persistent dollar’s weakness. On the data front, Markit downwardly revised manufacturing output in Germany and Spain, FXStreet’s Chief Analyst Valeria Bednarik reports.

Key quotes

“Markit published the final versions of the EU August Manufacturing PMIs, which were mixed. German index was downwardly revised to 52.2, while Spanish output resulted in 49.9, back into contraction territory. Better figures in France and Italy balanced the final Union’s number, which remained unchanged at 51.7. The EU unveil the preliminary estimate of August inflation, which was down to -0.2%, according to preliminary estimates.”

“During the upcoming Asian session, Markit will publish the final version of the August Manufacturing PMI, foreseen unchanged at 53.6. The country will also release the ISM Manufacturing PMI for the same month, seen at 54.4 from 54.2 in July.”

“The 4-hour chart shows that the EUR/USD pair is comfortably consolidating well above all of its moving averages, with the 20 SMA advancing further above the larger ones. Technical indicators, in the meantime, remain within overbought readings, with the Momentum retreating. Nevertheless and as the price holds on to daily highs, chances of a decline are limited.”