The EUR/USD is rising today as traders react to new development on Trump. It is also rising because of the relatively positiveeconomic data from the Eurozone. The pair is trading at 1.1730, which is slightly higher than Friday’s low of 1.1700.
Weaker US dollar pushes euro higher
The EUR/USD is rising today because of the overall weaker US dollar. The dollar index, which measures the strength of the dollar against key peers, is down by ~0.10%. This is because the dollar has fallen by 0.40% against the Swiss franc, 0.30% against the Swedish krona, 0.20% against the Canadian dollar, and by 0.05% against the sterling. The euro has risen by 0.15% against the dollar.
This price action is mostly because of the new developments about Donald Trump’s health. In a statement yesterday, doctors at the Walter Reed Medical Centre revealed that the president was doing better. They also raised the possibility that he will be discharged today.
Trump’s improving condition is negative for the US dollar because it reduces risk in the market. Indeed, on Friday, when news of his diagnosis emerged, the US dollar soared while global stocks rose because of risk aversion.
Eurozone retail sales and PMI
The EUR/USD is also reacting to the Eurozone retail sales and PMI data. According to Eurostat, retail sales rebounded in the Eurozone in August as the region continued to reopen. The overall sales rose by 4.4% during the month and by 3.7% on a year-on-year basis. That was a better number than the previous decline of 1.6%.
On a year-on-year basis, the sales rose by 2.2%. According to Eurostat, the biggest increases were in Belgium, France, and Germany. On the other hand, the biggest declines were in Romania, Slovenia, and Portugal.
The pair also reacted to better services and composite PMI numbers from Europe. According to Markit, the services PMI dropped to 48 in September from 50.5, in a sign that growth in the sector is cooling. That was the first time in several months that the PMI has been below 50. The services PMI in countries like Germany, France, Italy, and Spain remained below 50. In Germany and France, the services PMI fell to 50.6 and 47.5, respectively.
Meanwhile, the composite PMI, which includes the services and manufacturing PMI indices declined from 50.4 to 51.9. In a statement, Chris Williamson of Markit said:
“Much will depend on whether second waves of virus infections can be controlled, and whether social distancing restrictions can therefore be loosened to allow service sector activity to pick up again.”
EUR/USD technical outlook
The EUR/USD pair has been rising today as traders react to news on Trump and Eurozone’s data. On the four-hour chart, the pair has moved above the 25-day exponential moving averages. It is also slightly below the 38.2% Fibonacci retracement level. Most importantly, the pair is slightly below the important resistance level at 1.1750. Therefore, the pair is likely to continue rising today as bulls aim for last week’s high of 1.1768.