EUR/USD looks to regain 1.1400 ahead of Eurozone PMIs
|- Bulls-bears tug of war amid risk-aversion, weaker US dollar.
- Focus on EMU Purchasing Managers' Indexes: Trend intact
- Next of relevance remains trade developments, US Markit PMIs and existing home sales data.
Following the sharp overnight rebound from near 1.1340 troughs, the EUR/USD pair entered a phase of consolidation in the Asian trades around the 1.1370 region, as the bears guard the 1.1385 topside barrier heading towards the European opening bells.
The pair appears to lack direction at the press time, although the downside remains cushioned near 1.1360 levels amid subdued trading activity seen around the US dollar, as the USD bears fight for control, despite risk-off trade in the Asian equities. A fresh round of risk-aversion hit Asia on the reports that China imposed temporary antidumping measures on some products from the European Union (EU), Japan, South Korea and Indonesia.
Meanwhile, the EUR lacks the recovery momentum, as the bulls turn cautious heading into the flash manufacturing and services PMI releases from across the Euro area economies due later on from 0815 GMT onwards. The weakening Eurozone economy continues to remain the main concern for the EUR markets amid ongoing Brexit uncertainty.
“For the EU the data is critical, as concerns about slowing economic growth have limited advances for several months already. The manufacturing index is seen bouncing a bit, to 49.5, still in contraction territory, while the services index is forecasted to result at 52.7, slightly below the previous 52.8. For the US, forecasts are a bit more encouraging. The US will also release February Existing Home Sales seen u 2.2% MoM,” FXStreet’s Chief Analyst Valeria Bednarik notes.
EUR/USD Technical Levels
Haresh Menghani, Editor at FXStreet, notes:
"A sustained weakness back below the 1.1335-30 horizontal zone will further reinforce the expectations and prompt some fresh technical selling, dragging the pair back towards challenging the 1.1300 handle. A follow-through selling has the potential to extend the downfall further towards 1.1260-55 intermediate support en-route the 1.1200 round figure mark.
On the flip side, the 1.1400 handle now seems to act as an immediate resistance but the key barrier remains near the 50% Fibonacci level, around mid-1.1400s, above which the pair seems all set to surpass the very important 200-day SMA resistance, around the 1.1480 region, and aim towards reclaiming the key 1.1500 psychological mark."
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