Home » EUR/USD rebounds on Friday after US ISM PMI miss sparks risk-on investor appetite

EUR/USD rebounds on Friday after US ISM PMI miss sparks risk-on investor appetite

by FX BrokerNews
  • EUR/USD vaults back into 1.0840 following market pivot.
  • Market risk sentiment sees a late-week recovery on Friday.
  • US Manufacturing PMI unexpectedly declines, sparking rate cut hopes.

EUR/USD experienced a rebound from 1.0800 as markets shifted towards a risk-on sentiment following the unexpected decline in Friday’s US ISM Manufacturing Purchasing Managers Index (PMI), missing forecasts and indicating a deeper contraction. Deteriorating economic indicators are fueling renewed optimism for potential Federal Reserve (Fed) rate cuts.

Simultaneously, the most recent Monetary Policy Report from the Fed indicates a growing confidence in inflation reaching the 2% target. In February, the European Harmonized Index of Consumer Prices (HICP) inflation showed a milder-than-anticipated decrease, offering some sentiment support for the Euro (EUR) on Friday.

Daily digest market movers: EUR/USD attempts to re-enter upper bound of range on US PMI miss

  • For the year ending February, Pan-European Core HICP inflation exceeded expectations, registering at 3.1% YoY. This surpassed the anticipated decline to 2.9% from the previous reading of 3.3%.
  • Headline YoY HICP inflation slipped to 2.6% versus the forecast 2.5%, previously 2.8% .
  • In February, the US ISM Manufacturing PMI decreased to 47.8, falling short of the expected rise to 49.5 from the previous 49.1.
  • The Consumer Sentiment survey index from the University of Michigan for February declined to 76.9, falling below the anticipated stability at the forecasted 79.6.
  • The ISM Manufacturing Prices Paid for February decreased to 52.5, contrary to the anticipated increase to 53.0 from the prior month’s 52.9.
  • The upcoming week includes another Friday featuring US Nonfarm Payrolls (NFP), and on Wednesday, there is a preview of the ADP Employment Change.
  • Next week, the European Central Bank (ECB) is scheduled to announce its latest rate decision, set for Thursday.

Technical analysis: EUR/USD remains rangebound, finds bullish pickup on Friday

EUR/USD rebounded from the familiar near-term lows around the 1.0800 handle, reaching 1.0840, and is poised to conclude the trading week near its opening levels. Limited directional momentum confined the pair to a sideways range throughout the entire trading week, fluctuating between 1.0860 and 1.0800.

EUR/USD continues to be influenced by the 200-day Simple Moving Average (SMA) at 1.0830. Despite this, the pair maintains an approximate 1.3% gain from the recent low around 1.0695 observed in early February.

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