EUR/USD traded close to flat Monday and within the May 16-17 daily ranges, helping to reinforce bullish signals as investors await PMI data, which could facilitate a resumption of the recent rally.
EUR/USD is consolidating gains off the May 9 daily low.
Consolidation is a healthy development as it lets daily RSI unwind near overbought conditions.
The phase may resolve with the rally resuming and new up trend highs being set.
EUR/USD's hold above a slew of daily moving averages and the daily cloud as well and May's rising monthly RSI add to the bullish signals.
May PMI reports are now in focus.
Euro Zone HCOB composite PMI is due Wednesday and is estimated at 52.0 versus the prior 51.7.
The composite has been trending upward since October.
An above-estimate result Wednesday could lead investors to reduce the amount of ECB rate cuts currently priced in by futures.
U.S.
S&P Global Composite PMI Thursday is estimated at 51.1 versus the prior 51.3.
The PMI has been trending towards the 50 level, which separates expansion from contraction.
A result closer to 50 Thursday could sink yields and the dollar as the data could give the Fed another reason to lean less hawkish.
In that scenario yield spreads US2DE2=RR may tighten further, which could help propel EUR/USD upward.
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