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EUR/USD adds to Thursday’s losses below the 1.0800 mark.
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Flash Manufacturing PMIs in Germany and EMU disappoint in March.
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US Durable Goods Orders, advanced PMIs next on tap across the pond.
Further selling pressure now drags EUR/USD back below the 1.0800 yardstick, or 2-day lows, at the end of the week.
EUR/USD weaker post-PMIs
EUR/USD extended pessimism in the second half of the week and retreated from recent monthly peaks north of 1.0900 on the back of a moderate pick-up in greenback demand, while mixed prints from early PMIs in the euro cooperated with corrective daily declines.
Later, while the services sector remains healthy in the euro area, the manufacturing sector is still struggling to find a firm footing after early readings showed manufacturing PMI in Germany and the wider eurozone is expected to ease to 44.4 (from 46.3) and 47.1 (from 48.5) in the wider eurozone. respectively, in March.
Later in the US data space, durable goods orders for February flash PMI and the St. Louis Fed J. Endorsed in Bullard’s speech.
What to look for around EUR
EUR/USD gathers further downside traction and breaks below the 1.0800 mark on the back of some profit taking mood, the dollar’s recovery and disheartening results from the domestic calendar.
In the meantime, price action around the European currency should continue to closely follow dollar dynamics, as well as the potential next moves from the ECB in a context still dominated by elevated inflation, although amidst dwindling recession risks for the time being.
Key events in the euro area this week: European Council Meeting, EMU, Germany Flash PMIs (Friday).
Eminent issues on the back boiler: Continuation, or not, of the ECB hiking cycle. Impact of the Russia-Ukraine war on the growth prospects and inflation outlook in the region. Risks of inflation becoming entrenched.
EUR/USD levels to watch
So far, the pair is retreating 0.53% at 1.0769 and faces immediate support at 1.0732 (55-day SMA) followed by 1.0614 (100-day SMA) and finally 1.0516 (monthly low March 15). On the upside, a break above 1.0929 (monthly high March 23) would target 1.1032 (2023 high February 2) en route to 1.1100 (round level).
