EUR/USD failed to keep the bullish momentum going on Monday despite the risk-on sentiment fueled by positive noises on the U.S.-China trade talks, as mixed European PMIs weighed the common currency. The pair struggled around the 1.1175 area which caps gains since mid-October. In a wider picture, the euro still remains in a range limited by the 200- and 100-DMAs.
Eurozone PMIs came in a tad higher than expected, with German figures pointed to a slight pickup for the first time in four months. However, in general, the activity in the region remains depressed and will likely pull down GDP in the fourth quarter.
Against this backdrop, the euro struggles to extend gains even as risk sentiment improved decently, with Chinese yuan rising to the highest levels since mid-August since both China and the U.S. highlight further progress towards a comprehensive trade deal.
Technically, EUR/USD needs to clear the above mentioned local resistance in order to challenge the 200-DMA just below the 1.12 handle, which is the key level to watch for euro bulls. On the downside, the pair should stay above the 1.1120 zone, where the 100-DMA lies, so as not to lose the upside bias.