EUR/USD Forecast: Eurozone PMIs eyed for a fresh bearish confirmation

The EUR/USD pair consolidated its recent losses to multi-month lows and remained confined in a narrow trading band, around the 1.0800 mark for the second consecutive session on Thursday. The pair did attempt an intraday recovery, albeit failed to capitalize on the move amid sustained US dollar buying interest. Some strong follow-through selling around the Japanese yen, coupled with upbeat US economic data underpinned the greenback and kept exerting some pressure on the major.

Data released on Thursday showed that the Philly Fed Manufacturing index surpassed even the most optimistic estimates and surged to 36.7 in February from 17 previous – marking the highest reading since February 2017. On the other hand, the shared currency remained depressed amid pessimism about the Eurozone economic fallout from the coronavirus outbreak – in particular the export-driven German economy. Adding to this, weaker incoming economic data seemed to have fueled speculations for further policy easing by the European Central Bank.

Hence, the market focus will be on the flash version of the Eurozone PMI prints. Softer readings might be enough to dent the already weaker sentiment surrounding the shared currency and prompt some fresh selling. Later during the early North-American session, the US flash Manufacturing PMI will influence the USD price dynamics and further contribute towards producing some meaningful trading opportunities on the last day of the week.

Short-term technical outlook

From a technical perspective, nothing seems to have changed and the pair’s inability to register any meaningful recovery suggests that the near-term bearish pressure might still be far from being over. Some follow-through weakness below a one-year-old ascending trend-channel support, currently near the 1.0775-70 region, will reinforce the negative outlook and turn the pair vulnerable to accelerate the fall further towards the 1.0700 round-figure mark.

On the flip side, the 1.0820-30 region now seems to have emerged as immediate resistance and any subsequent recovery is likely to confront some fresh supply near mid-1.0800s. That said, some follow-through buying might trigger some near-term short-covering move and assist the pair to aim back towards reclaiming the 1.0900 mark with some intermediate resistance near the 1.0870-75 region.