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EUR/USD bounces off 1.2500

FXStreet (Edinburgh) - The shared currency found decent support around the key handle at 1.2500 on Thursday, with EUR/USD now regaining the 1.2530 area.

EUR/USD softer after PMI, focus on US

Disappointing flash manufacturing/services PMIs in the euro region dragged spot to the boundaries of the 1.2500 key support today, eroding Wednesday’s post-FOMC spike to the 1.2600 neighbourhood. The pair will remain vulnerable however, in light of the releases of the US economy: CPI (1.6% YoY exp.), Initial Claims (285K) and Markit’s PMI (56.4 exp.). “We remain cautious on EUR prospects multi month as the ECB’s balance sheet starts to expand more forcefully but the recent tentative signs of stabilisation (e.g. ZEW survey) bear careful watching. EUR/USD a sell into 1.2600-1.2650 for the time being”, suggested Richard Franulovich, Strategist at Westpac.

EUR/USD levels to consider

As of writing the pair is losing 0.14% at 1.2525 with the immediate support at 1.2485 (10-d MA) ahead of 1.2483 (200-h MA) and finally 1.2442 (low Nov.18). On the upside, a breakout of 1.2596 (30-d MA) would aim for 1.2602 (high Nov.19) and then 1.2614 (low Oct.23).

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