EUR/USD approaches 1.20 as Euro strength threatens export competitiveness

EUR/USD has advanced toward the psychologically significant 1.2000 level, gaining 0.7% (85 pips) in recent trading as the Euro's strength raises concerns among European policymakers about export competitiveness. The pair currently trades at 1.1950, its highest level since January, driven by improving Eurozone economic data and expectations of ECB policy normalization. Manufacturing PMIs across the bloc exceeded forecasts, with Germany posting 52.3 versus 51.5 expected. However, the Euro's 8% appreciation year-to-date threatens to dampen export growth, with automotive and machinery sectors already reporting margin pressures. ECB officials have begun verbal interventions, suggesting discomfort with the current exchange rate. Technical resistance at 1.2000 remains formidable, representing both psychological and historical significance. Support levels stand at 1.1880 and 1.1820. Traders should monitor upcoming ECB communications for potential policy shifts aimed at curbing Euro appreciation.