Apart from dollar weakness, the single currency is supported by stabilization of Italian bond yields as well as by general risk-on sentiment globally. In this context, the euro has a potential for further rise, especially as the speculations about the prospects for a slower tightening by the Fed next year.
On the other hand, the economic outlook remains uncertain in the euro one, and today’s fresh PMI data which came on a mixed note confirm this. As such, this factor could cap the pair’s potential in some way.
As for the dollar itself, the prepositioning ahead of the Fed meeting due next week shows that investors don’t hope for some aggressive signals, while the third rate hike this year has been fully priced in already. So the outlook for EURUSD remains intact and could be derailed if the risk-off tone reemerges.