EUR/USD hesitates below recent highs after mixed Eurozone PMIs.

The Euro consolidates below 1.1800 as PMI figures fail to cheer investors.
Eurozone’s manufacturing sector contracted unexpectedly in September while services activity accelerated.
Later on the day, the US preliminary PMIs and Fed’s Powell will provide fundamental guidance to the USD.

EUR/USD has ticked up, returning to levels near 1.1800 after bouncing from 1.1785 lows earlier on the day. Mixed business activity data in the Eurozone has provided some support to the Euro, yet with markets wary of risk. Market volatility remains subdued ahead of the flash Purchasing Managers Index (PMI) figures from the US and Fed Chairman Jerome Powell’s speech, both due later on the day.

Eurozone’s preliminary PMIs revealed that manufacturing activity contracted against expectations in September, while the services sector accelerated beyond forecasts. Data from Germany showed a similar performance, with the manufacturing sector’s reversal offset by a strong performance in services, while in France, both the manufacturing and services sectors contracted, increasing concerns about the region’s second-largest economy.

The Focus is now on the US Flash PMIs, which will be the main data points until Friday’s Personal Consumption Expenditures (PCE) Price Index release. Markets will want to test the resilience of the US economy to the higher trade tariffs ahead of a speech from Fed’s Powell, which might give further insight into the bank’s forward guidance.