Euro steadies at three-week highs amid positive data and lower Oil prices

The Euro (EUR) remains practically flat against the US Dollar (USD) at the European session opening times on Thursday, with the EUR/USD pair holding gains at the 1.1550 area after rallying about 1.6% from last week's lows. The common currency keeps drawing support from lower Oil prices and upbeat Eurozone data, while investors’ cautiousness ahead of the US Nonfarm Payrolls release is weighing on the USD.

German Factory Orders beat expectations with a 3.1% increase in June, largely exceeding the 0.3% market forecast, and a downwardly revised 0.3% reading in May. These figures follow an upward revision of the HCOB Services Purchasing Managers’ Index (PMI), released on Wednesday, and cement expectations that the European Central Bank (ECB) will hike rates in September.

US macroeconomic data fails to inspire

In the US, ADP Employment data disappointed on Wednesday, with a 44K increase, less than half June’s 98K rise and well below the 70K anticipated by the market consensus. Apart from that, the ISM Services PMIx edged up to 54.1 in July from 54 in the previous month but fell short of the market expectations of 54.5, with price pressures jumping and employment falling. 

On the geopolitical front, Reuters reported a proposed deal between Iran and Oman to reopen the Strait of Hormuz that gives Tehran control over traffic. The US Government did not respond to the plan, but US President Donald Trump has firmly opposed the possibility of Iranian control over the strait. 

On the technical front, FX analysts at Scotiabank highlight that EUR/USD's "short-term price action has revealed additional near-term resistance around 1.1550," but add that they "see nothing major ahead of the 200-day MA at 1.1630." In this context, the bank continues to "look to a near-term range bound between 1.1500 and 1.1600" as the Euro consolidates recent gains.