EUR/USD Current Price: 1.0746
- European and US data indicated a steep contraction in March, particularly in the services sector.
- US Senators working on an agreement over a massive fiscal stimulus package.
- EUR/USD peaked at 1.0887 but settled below 1.0800 with a limited bullish potential.
The EUR/USD pair is up for a second consecutive day, although off daily highs. The pair peaked at 1.0887 ahead of the US opening, as market players turned their back on the greenback and rushed back into high-yielding assets. Equities soared, with European major indexes up roughly 7.0% each. Data came in much worse than anticipated, yet the market was already prepared for it.
According to Markit, the EU economy “suffered an unprecedented collapse in business activity in March as the coronavirus outbreak intensified.” The Services PMI in the Union plummeted to 28.4, the lowest on record, while manufacturing output was down from 48.7 to 39.5, registering the largest monthly contraction of production since April 2009 German figures were quite alike, with the preliminary estimate of the Services PMI at 34.5 and manufacturing output down to 45.7. US figures were quite alike. The manufacturing output contracted to 49.2, better than the 42.8 expected, although services activity plummeted, with the index down to 39.1 from 49.4 previously. New Home Sales in February were down by 4.4%.
Equities were the best performers with European and American indexes soaring. Whether this rally is sustainable in time, is something yet to be seen. Treasury yields also advanced, as investors are hopeful US Senators will come to an agreement over a massive fiscal stimulus package to counter the coronavirus effects on the economy. This Wednesday, Germany will release the March IFO survey, with preliminary data already out, while the US will publish February Durable Goods Orders.
EUR/USD short-term technical outlook
The EUR/USD pair eased from the mentioned high to settle around 1.0750, below the 23.6% retracement of its latest daily slump at 1.0840. The bullish potential seems still limited, as the pair would need to advance past 1.0900 to shrug off its negative stance. In the 4-hour the pair is above its 20 SMA, which lost its bearish strength, although still far below the larger ones. Technical indicators have turned neutral, with the Momentum barely bouncing from its mid-line and the RSI directionless at around 46.
Support levels: 1.0725 1.0670 1.0630
Resistance levels: 1.0800 1.0840 1.0885
View Live Chart for the EUR/USD
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
EUR/USD trades weak below 1.0800 amid Good Friday lull, ahead of US PCE
EUR/USD remains depressed below 1.0800 after soft French inflation data, amid minimal volatility and thin liquidity on Good Friday. The pair keenly awaits the US PCE inflation data and Fed Chair Powell's speech for fresh hints on next week's price action.
GBP/USD holds steady above 1.2600 as markets stay calm on Good Friday
GBP/USD trades sideways above 1.2600 amid a typical Good Friday trading lull. A broadly firmer US Dollar could keep any upside attempts limited in the pair ahead of the US PCE inflation data and Fed Chair Powell's appearance.
Gold price sits at all-time highs above $2,230, US PCE eyed
Gold price hit all-time highs at $2,236 on Thursday to finish Q1 2024 with a bang. Most major world markets, including the US are closed due to Holy Friday, leaving volatility around Gold price highly subdued. US PCE inflation and Powell are awaited.
Jito price could hit $6 as JTO coils up inside this bullish pattern
Jito (JTO) price has been on an uptrend since forming a local bottom in early January. Since then, JTO has revisited the key swing point formed in early December, suggesting the bulls’ intention to move higher.
Key events in developed markets next week
Next week, the main focus will be inflation and the labour market in the Eurozone. We expect services inflation to be impacted by the easter effect, while the unemployment rate to be unchanged.