BUZZ-COMMENT-EUR/USD upside influences compound, dips being bought
Oct 23 (Reuters) - EUR/USD rose modestly on Friday after a euro zone PMI report that was just strong enough to leave bulls confident that influences from spreads, Brexit and safe-haven flows can support the euro.
The composite euro zone PMI contracted less than expected, featuring a surprisingly strong manufacturing expansion that offset a disappointing services sector performance. Overall the data tempered some investor concerns about the economy contracting, buoying the euro.
EUR/USD was also boosted by tightening 2-year German-U.S. yield spreads tightened and the halt in 10-year spread widening. Data has also driven investors out of the safe-haven dollar and yen, further supporting EUR/USD.
Reports of "real progress" on Brexit alleviated some market uncertainty, lifting risk sentiment which in turn underpinned EUR/USD.
Technicals highlight EUR/USD's upside risks. The 10-day moving average acted as a springboard for EUR/USD, a daily bull hammer has formed, RSIs are rising and the daily cloud top has been pierced.
Should risk sentiment remain upbeat, EUR/USD could break the Oct. 21 daily high and test 1.1915/30 resistance. A break above that zone would target September's monthly high.
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(Christopher Romano is a Reuters market analyst. The views expressed are his own)
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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