EUR/USD bears embark on a test below the 1.12 handle

EUR/USD is currently trading at 1.1205, a touch off a low of 1.1204 printed in recent trade as the dollar firms across the board. EUR/USD is down from the 1.1250 high.
EUR/USD is bumping along the 61.8% Fibo retracement support of the late 2016 swing lows to late Feb 2018 swing highs range - This is located down in the 1.1180s and bears target a break here, last tested on March 7th and the lowest level since June 2017.

Ross J Burland FXStreet

EUR/USD lost its footing, despite a risk on start in Asia following positive signals from Chain's manufacturing industry moving back into expansion:

China's manufacturing sector unexpectedly returned to growth for the first time in four months in March, "in a sign that government stimulus measures may be slowly gaining traction, a private business survey showed on Monday. But growth in new domestic and exports orders was marginal, suggesting the economy will remain under pressure in coming months and will likely require more policy support before it can convincingly stabilise," Reuters reported.

The Caixin/Markit Manufacturing Purchasing Managers' Index (PMI) expanded at the best pace in eight months in Marc. The number was rising to 50.8 from 49.9 in February, through the neutral 50-mark dividing expansion from contraction on a monthly basis and the highest level seen since July 2018.

However, in European trade, German final manufacturing PMI numbers were out and following the data from just over a week ago, where the German manufacturing numbers were hugely week and the euro dropped 100 points, traders were in anticipation of another disappointment - Indeed, numbers across the board were a disappointment:

Eurozone March preliminary CPI +1.4% vs +1.5% y/y expected
Germany March final manufacturing PMI 44.1 vs 44.7 prelim
Eurozone March final manufacturing PMI 47.5 vs 47.6 prelim

Then, the nail in the coffin for the euro came in spite of a retail sales miss for US data (although with upward revisions), the US ISM Manufacturing PMI beat expectations with 55.3 vs 54.5.

EUR/USD levels

Meanwhile, the DXY has continued higher, testing the 97.30 resistance and 78.6% Fibo of March's range, up from 97.03 lows. The euro is now on the verge of a break below 1.12 the figure. Stops are likely located below and bears will look to pierce the 61.8% Fibo support of 2017 swing lows to 2018 highs to open prospects of a run to 1.1110, as the May 2017 low and the 1.0814/78.6% retracement.

Author

Ross J Burland

FXStreet

Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.

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