EUR/USD holds above 1.0900 on upbeat Germany and Eurozone PMI data
EUR/USD continues to trade in positive territory above 1.0900 in the European session on Thursday, supported by the upbeat PMI data from Germany and the Eurozone, which showed a slowdown in the pace of contraction in private sector's activity. The ECB will release the October meeting accounts later in the day.
The Relative Strength Index (RSI) indicator on the 4-hour chart rose above 50 and EUR/USD gained traction after correcting toward the mid-point of the ascending regression channel, highlighting the lack of seller interest.
On the upside, 1.0950 (Fibonacci 61.8% retracement of the July-October downtrend) aligns as next resistance for EUR/USD before 1.1000 (psychological level, static level) and 1.1025 (static level from August).
Interim support is located at 1.0900 (psychological level, static level) ahead of 1.0850 (Fibonacci 50% retracement, mid-point of the ascending channel) and 1.0800 (lower limit of the ascending channel).
EUR/USD regained its traction and advanced beyond 1.0900 on Thursday after closing the second consecutive day in negative territory on Wednesday. The pair's near-term technical outlook suggests that buyers remain interested following the downward correction.
The US Dollar (USD) gathered strength mid-week after the US Department of Labor reported that the weekly Initial Jobless Claims declined to 209,000 in the week ending November 18 from 233,000. Later in the session, however, the modest rebound seen in Wall Street's main indexes limited the USD's gains and helped EUR/USD find support.
Early Thursday, the data from Germany showed that the pace of contraction in the private sector's business activity softened in early November, with the HCOB Composite PMI improving to 47.1 from 45.9 in October. Commenting on the data, "the November PMI numbers validate our assessment that Germany is currently in a recession, starting from the third quarter," said Dr. Cyrus de la Rubia, Chief Economist at Hamburg Commercial Bank, but noted that the recession may be shallower than expected.
Similarly, HCOB Composite PMI for the Eurozone rose to 47.1 from 46.5 in October.
Stock and bond markets in the US will be closed on Thursday and close early on Friday in observance of the Thanksgiving Day holiday. Hence, EUR/USD could have a hard time finding direction ahead of the weekend.