EUR/USD gathers upside traction near 1.1740

EUR/USD alternates gains with losses above the 1.17 mark.
Final March Manufacturing PMIs will take centre stage later.
US ISM Manufacturing, Initial Claims next of note across the pond.

Pablo Piovano FXStreet

EUR/USD navigates a tight range around the 1.1730 region in the second half of the week.

EUR/USD stays close to YTD lows

EUR/USD exchanges advances and pullbacks amidst a narrow trading range on Maundy Thursday, always above the 1.1700 yardstick amidst a generalized consolidative mood in the global markets.

In the meantime, the dollar appears slightly bid following Wednesday’s indecisive price action and amidst a pullback in yields of the US 10-year reference to the 1.70% region after nearly hitting 1.80% on Tuesday.

Later in the euro docket, Markit will publish the final gauge of the Manufacturing PMI in the euro area for the month of March. Earlier in the session, German Retail Sales expanded 1.2% MoM in February and contracted 9.0% from a year earlier.

In the US data space, the ISM Manufacturing will take centre stage seconded by the usual weekly Claims and the March Manufacturing PMI. In addition, Philly Fed P.Harker (2022 voter, hawkish) is due to speak.

What to look for around EUR

EUR/USD meets some decent support in the 1.1700 neighbourhood so far this week. The strong pullback in the pair came along the persistent bid bias of the greenback, which has been undermining the constructive view in the pair in the past weeks. The deterioration of the morale in Euroland coupled with the poor pace of the vaccine rollout in the region and the outperformance of the US economy (vs. its G10 peers) have all been collaborating with the renewed offered stance around the single currency. However, the steady hand from the ECB (despite some verbal concerns) in combination with the expected rebound of the economic activity in the region in the post-pandemic stage is likely to prevent a much deeper pullback in the pair in the longer run.

Key events in the euro area this week: Final PMIs in the euro area (Thursday).

Eminent issues on the back boiler: Asymmetric economic recovery in the region. Sustainability of the pick-up in inflation figures. Progress of the vaccine rollout. Probable political effervescence around the EU Recovery Fund.

EUR/USD levels to watch

At the moment, the index is gaining 0.10% at 1.1741 and a breakout of 1.1867 (200-day SMA) would target 1.1989 (weekly high Mar.11) en route to 1.2000 (psychological level). On the flip side, the next support emerges at 1.1704 (2021 low Mar.31) seconded by 1.1602 (monthly low Nov.4) and finally 1.1576 (2008-2021 support line).

Author

Pablo Piovano

FXStreet

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

EUR/USD stays below 1.1850 after dismal German sentiment data

EUR/USD stays in negative territory below 1.1850 in the second half of the day on Tuesday. Renewed US Dollar strength, combined with a softer risk tone keep the pair undermined alongside downbeat German ZEW sentiment readings for February.

GBP/USD falls toward 1.3550, pressured by weak UK jobs report

GBP/USD remains under bearish pressure and extends its decline below 1.3600 on Tuesday. The United Kingdom employment data suggested worsening labor market conditions, bolstering bets for a BoE interest rate cut next month and making it difficult for Pound Sterling to stay resilient against its peers.

Gold pares intraday losses; keeps the red above $4,900 amid receding safe-haven demand

Gold (XAU/USD) attracts some follow-through selling for the second straight day and dives to over a one-week low, around the $4,858 area, heading into the European session on Tuesday.

Canada CPI expected to show sticky inflation in January, still above BoC’s target

Economists see the headline CPI rising by 2.4% in a year to January, still above the BoC’s target and matching December’s increase. On a monthly basis, prices are expected to rise by 0.1%.

UK jobs market weakens, bolstering rate cut hopes

In the UK, the latest jobs report made for difficult reading. Nonetheless, this represents yet another reminder for the Bank of England that they need to act swiftly given the collapse in inflation expected over the coming months.

Stellar mixed sentiment caps recovery

Stellar price remains under pressure, trading at $0.170 on Tuesday after failing to close above the key resistance on Sunday. The derivatives metric supports the bearish sentiment, with XLM’s short bets rising among traders and funding rates turning negative.