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EUR/USD edges lower ahead of Important European PMI releases

Yesterday the rising dollar helped to push the EUR/USD down towards the 1.06 handle again. However, the Euro did not seriously threaten the interim double bottom at 1.0601 and 1.0602. The low seen was set at 1.0623 and just like the Pound, it rebounded into the US close, as the steam came off the dollar. The EUR/USD closed last night at 1.0655. Earlier today it peaked at 1.0661, but as with the GBP/USD it has just now edged back to a session low at 1.0638. Now, there is some European data that could have a significant impact on the Euro this morning. That is the April  flash PMI readings on Manufacturing and Services. They come from France (7.15am GMT) and Germany (7.30am GMT). The markets will be pawing over this data very closely, to see if it endorsees the outlook for an ECB rate cut in June, or not. Right now it looks pretty clear from all the latest ECB rhetoric; that a cut in June is looking like a slam dunk. This, coupled with the exact opposite outlook from the US is the overriding dynamic weighing on the EUR/USD. Until that goes away, the EUR/USD will not rebound and the risks of a deeper fall below that 1.06 support will remain elevated. The EUR/USD is currently trading at 1.0639
 

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