The market is reacting more ‘sensibly’ to the PMI releases
See here for global coronavirus case data
EUR/USD is keeping around 1.0960-70 levels currently, with price action centered around the 100-day MA (red line) @ 1.0968 still after the failure to break 1.1000 yesterday.
The French and German PMI readings earlier pretty much reaffirmed the current economic situation i.e. conditions in May are better than in April but they are still nowhere near normal levels whatsoever.
Again, mind you, the «doubling» in the services and composite prints does not mean that business activity actually improved by twice as much. It just means that there is a higher share of businesses reporting better conditions in May relative to April.
But these ‘better conditions’ does not tell us about how businesses are faring relative to more normal times before the coronavirus crisis.
Anyway, back to the EUR/USD chart. It seems the market has taken the news in stride and the focus remains on the risk mood for the part today.
European equities and US futures are still softer on the session and that is helping the dollar keep a little higher across the board at the moment.
That is helping sellers but it would be imperative for them to try and keep a move below the 100-day MA to build further downside momentum ahead of the close today.
As for buyers, the challenge is to keep above that 100-day MA and try to look towards a retest of the 1.1000 handle once more.
The risk mood is still the main driver at the moment, so continue to keep an eye on stocks and how they perform in the sessions ahead.