EUR/USD ignores losses in stocks, remains bid ahead of Eurozone PMIs

• EUR/USD ekes out gains amid stock market losses. 
• German PMI is likely to show continued expansion in the manufacturing sector. 
• ECB's lack of direct criticism of EUR's strength leaves the door open for further rally.

EUR/USD is showing resilience to losses in stock markets, with investors eyeing key data releases, which are expected to show a continued expansion of the manufacturing sector in Germany and across the Eurozone. 

At press time, the pair is trading at session highs near 1.2175, representing a 0.12% gain on the day. The anti-risk greenback is struggling to draw bids, keeping  EUR/USD bid despite the 0.37% decline in the S&P 500 futures and the pullback in the major Asian stock market indices. 

Expectations for generous US fiscal spending under Joe Biden's presidency look to be overshadowing the risk-off tone in stocks and keeping the dollar under pressure. 

Focus on PMIs

The preliminary German Manufacturing Purchasing Managers' Indices (PMI) is seen falling to 57.5 in January from December's 58.3. A reading above 50 indicates expansion. 

In other words, the data, due for release at 08:30 GMT, is expected to show continued expansion in the activity despite the coronavirus-induced lockdown restrictions. The broader Eurozone PMI is forecast to paint a similar picture. 

EUR/USD will likely extend gains if the data prints in line with estimates or beats expectations. 

The European Central Bank's all talk and now walk approach on the exchange rate is another factor that favors a continued rise in the single currency. On Thursday, President Lagarde avoided any direct criticism of the currency, saying only that FX appreciation is a drag on inflation, as noted by BK Asset Management's Kathy Lien. 

Apart from PMI figures, the new US President Joe Biden's speech at 19:45 GMT could inject volatility into the currency markets. 

Technical levels