EUR/USD plunges back into familiar consolidation levels on Thursday after short-lived rally

The EUR/USD drove headfirst back into familiar territory on Thursday, wit the pair falling three-quarters of a percent through the day to end near 1.0850. Wednesday’s Fed-fueled rally proved to be a whipsaw rather than a break of character for the markets, and the Fiber is pinned firmly back into familiar near-term consolidation territory. 

The Euro (EUR) quickly backpedaled in early Thursday trading after European Purchasing Managers Index (PMI) figures for the European continent shook investors awake. As the economic powerhouse of the European Union, Germany’s mixed PMI prints splashed cold water on Euro bidders, with the German March Manufacturing PMI sliding to a five-month low of 41.6 as business activity confidence continues to wither. Germany’s Manufacturing component was expected to tick upwards to 43.1 from 42.5, and the downside print drowned out an uptick in Germany’s Services PMI component, which printed above expectations at 49.8, beating the forecast 49.8 and inches closer towards positive 50.0 territory after last month’s 48.3.

The pan-European HCOB Manufacturing PMI was expected to come in at an even 47.0 versus the previous 46.5, but missed expectations to print on the downside at 45.7. 

US data also came in mixed, helping to bolster safe-haven bids into the Greenback. March’s US S&P Global Composite PMI declined slightly to 52.2 from the previous 52.5, with the backslide fueled by a miss for the US Services PMI component. US March Services PMI fell more than expected, printing at 51.7 versus the forecast 52.0 after coming in at 52.3 in February.

The trading week will wrap up on Friday with German IFO Expectations, which are expected to improve slightly to 84.7 from 84.1. On the US side, Friday brings a batch of Federal Reserve (Fed) board member speeches as the black-out period from the latest Fed rate call lifts. Fed Chairman Jerome Powell will be headlining the Fed appearance on Friday, slated to give a speech at 13:00 GMT at a Fed Listens event in Washington, DC.

EUR/USD technical outlook

The EUR/USD fell from the day’s early high of 1.09426, declining eight-tenths of a percent top-to-bottom to touch 1.08546. The pair hit the closing bell on Thursday’s trading window near 1.0857. 

The pair is getting mired in the 200-period Exponential Moving Average (EMA) near 1.0864, and Thursday’s bearish turnaround leaves the EUR/USD at risk of chalking in a lower high on the 4-hour charts.

EUR/USD 15-minute chart

EUR/USD 4-hour chart