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EUR/USD Daily Chart Analysis

EUR/USD Edges Higher to 1.0860 Amid Risk-On Sentiment; Eyes on European PMIs and Key 1.0890 Resistance

The EUR/USD pair has seen a modest rise, currently trading between 1.0836 and 1.0848, buoyed by positive risk sentiment ahead of the upcoming European manufacturing PMI data. The U.S. dollar’s slight 0.1% decline has aided the euro’s gains. This risk-on attitude is reflected in Asian markets, where the Nikkei index increased by 0.92%, and other Asian markets excluding Japan rose by 1.5%. Additionally, e-mini S&P futures climbed by 0.24%, suggesting a favorable risk environment. The spotlight in Europe is on the manufacturing PMIs, with forecasts suggesting a Eurozone and national PMI reading of 47.4. Technically, the charts show neutral momentum, with the 21-day Bollinger bands moving upwards, but the 5, 10, and 50-day moving averages offer mixed signals, indicating no strong directional bias.

Regarding support and resistance, the recent low of 1.0788 from last Thursday serves as a key support level, while last week’s high of 1.0884, which capped gains on Friday, stands as the primary resistance. Additionally, options market data reveals significant strikes at 1.08155, with a notional value of 1.174 billion, and at 1.0870, with a notional value of 1.414 billion, set to expire on June 3rd. This could influence short-term price movements. On a fundamental level, the slight weakening of the U.S. dollar points to a minor shift in market sentiment, likely driven by global risk-on factors. The upcoming manufacturing PMIs are critical for the EUR/USD’s next move, offering insights into the European manufacturing sector’s health amid ongoing economic challenges. Currently, the pair remains in a holding pattern as traders await the data releases and monitor market sentiment for further cues.