The EUR/USD pair is experiencing a slight uptick, trading within the range of 1.0846-1.0858, as risk sentiment remains positive ahead of the upcoming European manufacturing PMIs. The U.S. dollar has seen a modest decline of 0.1%, which has contributed to the minor gains in the EUR/USD. The risk-on sentiment is evident across Asian markets, with the Nikkei index rising by 0.95% and other Asian markets excluding Japan (AsiaxJP) advancing by 1.7%. Additionally, e-mini S&P futures are up by 0.25%, indicating a favorable risk environment. The focus in Europe will be on the manufacturing PMIs, with the Eurozone and national PMIs expected to come in at a forecasted 47.4. From a technical perspective, the charts indicate neutral momentum studies, with the 21-day Bollinger bands climbing. However, the signals from the 5, 10, and 21-day moving averages are conflicting, suggesting no clear directional bias at the moment.

In terms of support and resistance levels, the recent low of 1.0788, observed last Thursday, serves as the initial support level, while last week's high of 1.0889, which capped the gains on Friday, acts as the first significant resistance. Additionally, options market activity shows close strikes at 1.0855/60 with a notional value of 1.174 billion and at 1.0870 with a notional value of 1.414 billion expiring on June 3rd, which could influence short-term price action. Fundamentally, the modest decline in the U.S. dollar suggests a slight shift in market sentiment, possibly driven by broader risk-on factors in the global financial markets. The manufacturing PMIs will be crucial in determining the next move for the EUR/USD pair, as they will provide insights into the health of the European manufacturing sector amidst ongoing economic challenges. Overall, the pair is in a wait-and-see mode, with traders closely monitoring the upcoming data releases and market sentiment for further direction.

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