Forex - EUR/USD Extends Gains, Climbs to 4-Day High

Forexpros – The euro extended gains against the U.S. dollar on Tuesday, rising to a four-day high after data showed that both German and euro zone PMI data didn’t slow as much as expected in August.

EUR/USD hit 1.4500 during European early afternoon, the pair’s highest since August 17; the pair subsequently consolidated at 1.4477, surging 0.82%.

The pair was likely to find support at 1.4324, the low of July 17 and short-term resistance at 1.4535, the high of July 27.

The euro zone’s manufacturing purchasing managers’ index fell to 49.7 from 50.4 in July. Economists had forecast a reading of 49.5. The region’s services PMI slipped to 51.5 from 51.6 in July, holding above forecasts for a reading of 50.7.

Germany’s manufacturing purchasing managers’ index remained unchanged at 52.0 in August, beating forecasts for a decline to 50.8.

The single currency shrugged off data showing that Germany’s ZEW index of economic sentiment fell sharply in August, as fears over the outlook for global growth weighed.

Earlier in the day, risk appetite was boosted after a preliminary reading of China’s August purchasing managers’ index edged up to 49.8 in August from a final reading of 49.3 the previous month.

A number below 50 indicates contraction in the sector, but the report lifted market sentiment, following speculation that the reading could have been much weaker.

The euro was also higher against the pound, with EUR/GBP rising 0.44% to hit 0.8765.

Later Tuesday, the U.S. was to release official data on new home sales.

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