- The Euro’s Fed-fueled rise against the Greenback proved short-lived.
- Fed tips hat to future rate cuts, US Dollar selloff proves temporary.
- European Manufacturing PMI slips, US Services PMI contracts.
On Thursday, the EUR/USD swiftly reverted to familiar territory, experiencing a decline of three-quarters of a percent throughout the day to settle near 1.0850. Wednesday’s rally, influenced by the Federal Reserve, turned out to be more of a whipsaw effect than a significant shift in market sentiment, as the pair remained firmly entrenched in near-term consolidation.
The Euro (EUR) faced early setbacks in Thursday’s trading session following the release of Purchasing Managers Index (PMI) figures for the European continent, which caught investors’ attention. Particularly, Germany, being the economic powerhouse of the European Union, reported mixed PMI prints, dampening optimism among Euro investors. Germany’s March Manufacturing PMI plunged to a five-month low of 41.6, indicating a decline in business activity confidence. This result contrasted with expectations of a slight uptick to 43.1 from the previous reading of 42.5. Although Germany’s Services PMI component surpassed expectations by printing above 49.8, it still fell short of reaching the positive 50.0 territory.
The pan-European HCOB Manufacturing PMI was also disappointing, coming in lower than anticipated at 45.7 instead of the expected 47.0.
In the US, data releases presented a mixed picture, contributing to the strengthening of safe-haven demand for the Greenback. March’s US S&P Global Composite PMI slightly declined to 52.2 from the previous 52.5, primarily driven by a miss in the US Services PMI component. The US March Services PMI fell more than expected, registering at 51.7 compared to the forecasted 52.0 after February’s reading of 52.3.
Closing out the trading week, Friday will see the release of German IFO Expectations, anticipated to show a slight improvement to 84.7 from 84.1. On the US front, a series of speeches from Federal Reserve (Fed) board members are scheduled as the blackout period following the latest Fed rate call comes to an end. Fed Chairman Jerome Powell will headline the event, delivering a speech at 13:00 GMT during 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
EUR/USD
