EURUSD briefly jumped to the 1.1160 area as traders cheered positive PMI numbers out of France. But the euro pared earlier gains quickly along with risk assets following German and Eurozone figures which knocked down the optimism as the numbers came in lower than expected and confirmed that the regional economy continues to struggle in October. In particular, the German services PMI hit a fresh three-year low, with the Eurozone composite index fell to the lowest level since June 2013.
Now, focus shifts to the ECB meeting. However, this time, it will likely be a non-event as this is the last meeting for Draghi as the president. Besides, the central bank delivered additional stimulus measures at the previous meeting. Nevertheless, any dovish statements on the state of the European economy could hurt the common currency in the short term.
Also, traders will closely monitor the upcoming US Vise-President Mike Pence speech on China. Should the policymaker criticize Beijing and its policy, risk sentiment could turn sour, which would be a negative signal for the euro as well.
Technically, EURUSD needs to hold above the 1.11 handle and regain the 100-DMA in the immediate term in order to avoid a more intense selling pressure. US PMI data could affect the pair’s tone later in the day as well.