EUR/USD: Stretched too thin above 1.23 ahead of EU PMIs?

The Euro has capitalized in Dollar softness following the FOMC's rate hike on Wednesday that saw the EUR/USD lift to an Asia session high of 1.2370 as markets sold off equities and the Greenback in retaliation for the Fed not lifting their 'dot plot' to include a fourth rate hike this year.

Thursday sees plenty of Markit PMIs

Turning to the European session ahead, a slew of Markit flash PMIs and IFO business climate indicators are waiting in the early hours, kicking off at 08:30 GMT with preliminary German Manufacturing and Services PMIs. The Manufacturing PMI is expected to come in at 59.8 versus the previous 60.6, the Services PMI s forecast at 55.0 versus the previous 55.3, and the PMI Composite is forecast at 57.0 versus the previous 57.6. Also dropping at 08:30 GMT will be a speech from the European Central Bank's (ECB) Vice-Chair, Sabine Lautenschläger.

Thirty minutes later at 09:00 GMT the ECB drops their Economic Bulletin, which comes every two weeks following every Governing Council meeting. There's also German IFO Expectations and Business Climate, forecast at 104.4 and 114.8 respectively, with Expectations previously at 105.4 and Business Climate at 115.4 in the previous period. 09:00 also sees preliminary Markit PMIs for the general Eurozone, with Manufacturing forecast at 58.1 versus the previous 58.6, Services at 56.0 compared to the previous 56.2, and the Composite PMI anticipated at 56.7 versus the 57.1 during the last period.

Every single economic indicator for the European Union (EU) today is braced for a slight contraction in confidence and activity as the economic slowdown in the first quarter of 2018 begins to take hold, but the Euro is heading into the next session on a confident note, and a positive tone to releases this morning could bolster the Euro further.

EUR/USD Levels to consider

March has been an ineffective month for the EUR/USD pair, and yesterday's Dollar selloff sees the Euro trading back into a series of declining highs. Recent volatility has left support and resistance points spread thin, with current support at yesterday's swing points at 1.2290 and Tuesday's low of 1.2240, with resistance at l;ast week's swing high ponits of 1.2380 and 1.2415.