EUR/USD juggles around 0.9840, downside looks likely ahead of PMI data

The EUR/USD pair has turned sideways around 0.9840 after rebounding from near the critical support of 0.9813 in the early Tokyo session. A rebound move after multiple tests of Wednesday’s low indicates the strength of the support. It will be worth watching how far the asset can plunge after surrendering the above-mentioned support.

The impact of the harsh-than-predicted tone adopted by the Federal Reserve (Fed) chair Jerome Powell while guiding over the peak of interest rates is going to stay for a tad longer period. An escalation in interest rate projections by a whooping difference from 3.8% to 4.6% is sufficient to accelerate volatility in the economy. For achieving price stability in the economy, the rate hikes will result in a loss of job opportunities, demand for housing and durable goods, and growth rate projections.

Going forwards, the release of the S&P Global PMI data will remain in focus. The Manufacturing PMI is seen lower at 51.1 vs. the prior release of 51.5. While the Services PMI will improve to 45.0 against the prior print of 43.7.

On the Eurozone front, escalating fears of a nuclear attack by Russian leader Vladimir Putin are forcing the market veterans to extend the downside targets for the shared currency bulls. Apart from that, the release of the European Central Bank (ECB)’s Economic Bulletin sees the economy to grow by 3.1% in 2022, 0.9% in 2023, and 1.9% in 2024.

The Eurozone Manufacturing PMI is expected to land at 48.7, lower than the prior release of 49.6. Also, the Services PMI will shift lower to 49.0 vs. the former figure of 49.6.