EUR/USD prints five-day winning streak ahead of German preliminary PMIs
- EUR/USD remains bid above 1.16, having hit a low of 1.1589 in early Asia.
- July's PMI from Germany, Eurozone to provide cues on Friday.
- The Sino-US tussle poses risk to EUR/USD rally.
EUR/USD advanced for the fifth straight day on Thursday, exceeding 1.16 in its longest daily winning streak in more than a month.
The currency pair rose over 0.25% to reach 1.1627, the highest level since September 2018, and is currently trading near 1.1610.
Buoyed by European leaders agreeing on a coronavirus rescue package, the shared currency has gained over 1.5% this week. The risk-on action in the global equity markets seen in the first half of this week weighed over the safe-haven dollar and may have added to upward pressure around EUR/USD.
The focus now is on July’s private sector PMIs from Germany, Sino-US tensions, and the next U.S fiscal package.
The data due at 07:30 GMT is expected to show the German Manufacturing PMI rose to 48 in July from 45.2 in June. Meanwhile, the Eurozone Manufacturing PMI is forecasted to rise to 50 from 47.4. A reading below 50 indicates contraction. A big beat on expectations will likely draw stronger buying pressure for the EUR.
However, the greenback may find haven bids if China shuts down the US consulate in Wuhan or other regions in retaliation to US' recent decision to shut down the China consulate in Houston. Escalation of tensions between the two nations will impact risk sentiment at a time when the US Congress is struggling to pass another coronavirus stimulus package and the US data is reviving growth concerns.
More than 1.4 million people applied for jobless benefits last week, the Labor Department said Thursday, up from 1.3 million the previous week. The first increase since March suggests the labor market is stalling amid a resurgence of the coronavirus crisis.
Technical levels