The Euro extended its advance against the broad-based US Dollar sell-off, trading to 1.1154 overnight and 17 March highs before easing to 1.1132. Euro area Manufacturing PMI’s were mostly within forecasts but were below preliminary readings in May. The shared currency faces strong resistance at the 1.1150-1.1200 area ahead of Thursday’s ECB rate policy meeting.
Brexit worries have returned to the spotlight and will be a major headache not only for the British Pound but for the Euro too. The UK and the EU sit down for another round of virtual talks this week. While meaningful progress is unlikely until the Northern Hemisphere Autumn, the chances of a free trade agreement are fading.
Speculative net long Euro bets continue to be at elevated levels which is another drag to further gains from current levels.
EUR/USD has immediate resistance at the 1.1150 and a clean break above 1.1154 highs could see 1.1186. The 1.1200 resistance level remains strong. Immediate support can be found at 1.1100 followed by 1.1060. Expect a trading range today between 1.1020-1.1150. Prefer to sell any rallies.
