EUR/USD upside capped near 1.2335 on mixed EZ PMIs

• Mixed Euro area manufacturing PMIs capped the gains.
• Eyes broader market sentiment and Fedspeak for fresh incentives.

The EUR/USD pair trimmed gains and reverts towards the 1.23 handle, as the US dollar appears to have found some buyers against its main competitors, with the return of the full markets in Europe.

Moreover, mixed releases of the Euro area final manufacturing PMI reports also weighed down on the EUR, restricting further upside. Germany’s manufacturing PMI was revised lower to 58.2 in March while the Eurozone manufacturing PMI was seen steady at 56.6 last month.

However, the bulls manage to retain control amid the renewed fears over the US-China trade war, which weighs down on the European equities and in turn boosts the demand for the funding currency, the Euro.

Looking ahead, “the US will bring little relevant data today, which won't be enough to overshadow sentiment-related trading. The country will release a regional business conditions index and the IBD/TIPP Economic Optimism survey for April, expected at 55.2 from a previous 55.6,” says Valeria Bednarik, Chief Analyst at FXStreet.

EUR/USD levels to watch

Commerzbank’s Analyst Karen Jones notes, “EUR/USD last week did not maintain the break above the early March high at 1.2447 and eased back into its previous range. This has neutralized our outlook. We remain unable to rule out a retest of the January and February highs at 1.2538/56 and the long-term downtrend at 1.2622, but this is looking less likely.”

“We would allow for a slide to the 1.2240 20th March low. This is made up of the mid-January and current March lows and the 2017-2018 uptrend. A weekly close below here would add weight to the idea that the market recently topped at 1.2556,” Karen adds.