EUR/USD dips below 1.0750 on strong US ISM PMI reading

The Euro extends its losses against the US Dollar, with most European markets being closed in observance of Easter Monday. Data from the United States sponsored a leg down in the EUR/USD, which tumbled more than 0.40% and traded at 1.0742.

Strong US ISM Manufacturing PMI and a jump in prices paid, to keep Fed on hold

The Institute for Supply Management (ISM) revealed that business activity in March expanded for the first time since September 2022, an indication that the economy remains solid. The Manufacturing PMI came at 50.3, exceeding estimates of 48.4 and smashing February’s 47.8 reading. The same report revealed that the Prices Paid Index expanded to 55.8, its highest level since August 2022, when it hit 52.5. This could deter the Federal Reserve from easing policy, as the economy fares better than expected.

At around 13:45 GMT, S&P Global revealed the latest revision of March’s Manufacturing PMI for the United States, coming at 51.9, below the previous reading of 52.2.

Following the data, the EUR/USD has extended its losses past the psychological 1.0750 figure, which could exacerbate a test of the February 14 swing low of 1.0694.

In the meantime, the US Dollar Index (DXY), which measures the buck’s performance against a basket of peers rally 0.36%, is up at 105.93, while US Treasury yields rise. The 10-year benchmark note rate is at 4.305%, up almost ten basis points.

Following the data release, money market traders see a 61% chance of the Fed cutting rates by 25 basis points, as depicted via the CME FedWatch Tool.

Across the pond, the Eurozone (EU) economic docket will feature the release of the HCOB manufacturing PMI for Spain, Italy, France, Germany, and the whole bloc. Most readings, except for Spain, are expected to deteriorate further and remain in recessionary territory.

EUR/USD Price Analysis: Technical outlook

The EUR/USD daily chart portrays the pair as aiming toward the 1.0700 figure, ahead of challenging 1.0694, February’s 14 low. A breach of the latter will expose the November 10 low intermediate support level at 1.0656, followed by major support at 1.0516, the November 1 swing low. On the other hand, if buyers reclaim 1.0750, look for an upside correction toward 1.0800.