The eurozone economy is providing moderate support for the euro. The manufacturing PMI rose to 51.9 in July, while output expanded at its fastest pace in nearly four and a half years. However, the recovery remains uneven, as new orders and export demand are still weak. This combination supports the currency but does not create a strong independent bullish impulse.

The main driver of the current session remains US dollar weakness following the Federal Reserve’s decision to keep interest rates unchanged and coordinated action by the United States and Japan to support the yen. The US Dollar Index is holding near a two-month low, although strong US manufacturing data for July and elevated bond yields are limiting further selling. The market remains cautious ahead of employment and services-sector data.

The ECB kept interest rates unchanged in July but left open the possibility of further policy tightening, while eurozone inflation accelerated to 2.9%. This reduces the likelihood of near-term monetary easing and supports the euro. Unless US data revive expectations of faster Federal Reserve rate increases, EURUSD is likely to retain the advantage during the current session, with the baseline scenario allowing for further gains.

Trading idea: BUY 1.15100, SL 1.14750, TP 1.15850