Euro zone economic sentiment improved more than expected in September, data showed on Tuesday, mainly thanks to a rise in optimism in the services sector despite concerns about a second wave of the COVID-19 pandemic. The European Commission’s monthly survey showed sentiment in the 19 countries sharing the euro rising to 91.1 points this month from 87.5 in August, beating market expectations of an improvement to 89.0 points.

The gains were mainly a result of sentiment in services, the euro zone economy’s biggest sector producing some two-thirds of gross domestic product, improving to -11.1 from -17.2. Economists polled by Reuters had expected a rise to only -15.7. Optimism in industry rose to -11.1 from -12.8, falling short of expectations of a rise to -10.0, and consumer sentiment was in line with expectations rising to -13.9 from -14.7. Inflation expectations in the industry improved to -0.6 from -2.1 but continued to fall among consumers, easing to 12.5 from 16.9 in August.

Meanwhile, the S&P 500 futures are up 0.30% and weighing over the safe-haven dollar. The stock futures seem to have picked up a bid in response to the better-than-expected China Manufacturing PMI released early Wednesday.

Adding to it, News is crossing the wires that the probability of President Trump retaining office following the Nov. 3 election has declined to 40% following the conclusion of his first debate with the Democrat candidate Joe Biden. According to the odds-maker market, the probability of Trump winning the election stood at 42% before the debate.

President Trump and Democrat candidate Biden sparred over the economy, law enforcement, climate change, and election integrity during the first Presidential debate. While Trump said that the US is witnessing a V-shaped recovery from the corona-virus crash, Biden talked about the uneven recovery, increasing the gap between the rich and the poor. Trump added that the election outcome might take months to come.

ECB’s President Lagarde is due to speak in the Institute for Monetary and Financial Stability, in Frankfurt. The US will publish several macroeconomic reports, although the most important will be the ADP survey on private jobs’ creation, foreseen at 648K from 428K in August.

EUR/USD 4 Hour Chart:

Support: 1.1687 (S1), 1.1632 (S2), 1.1603 (S3).

Resistance: 1.1771 (R1), 1.1800 (R2), 1.1856 (R3).

In the prevailing market condition in favor of Euro, we expect a bullish trend for EUR/USD.