After reaching its highest level since early February around 1.0930 on Thursday the EURUSD has reversed course and fallen below 1.0850. The pair’s near-term technical forecast indicates that positive momentum will be lost in the near future. The EURUSD surge was spurred by broad-based selling pressure surrounding the US Dollar in the early part of the day on Thursday. Nevertheless, the pair lost traction during American trading hours as Wall Street’s key indexes dropped from session highs. Allowing the USD to minimize its losses. Early Friday, US market index futures are largely flat for the day, indicating a risk-neutral atmosphere.
S&P Global will publish PMI surveys for Germany, the Eurozone, and the United States.
Meanwhile, European Central Bank (ECB) policymaker Klaas Knot stated On Thursday that another rate rise is likely in May. “The risks of inflation are clearly skewed to the upside; “.The effects of second-round wage increases are becoming more visible,” .Knot added. As the gap between the Federal Reserve’s and the ECB’s outlook widens. EUR downside USD’s is likely to be limited to technical corrections, at least in the short term.
Moreover S&P Global will publish preliminary March PMI surveys for Germany. The Eurozone, and the United States. The composite PMIs for all three are projected to remain slightly over 50.
Further Market investors are expected to pay careful attention to wage inflation statements, particularly in the service sector. If data for Germany and the Eurozone confirm Knot’s comments on wage developments, the Euro could maintain its competitiveness against its rivals.
The USD, on the other hand, is expected to strengthen ahead of the weekend. If PMI surveys show an acceleration in private-sector salary increases. Further Yet, market positioning for the next Fed policy decision is unlikely to be much affected, suggesting that the reaction will be brief. As of this writing, the chance of another 25 basis point Fed rate rise in May is 33.5%, according to the CME Group Fed Watch Tool.
EURUSD Technical Analysis
The EURUSD broke below the ascending regression channel. And the Dailyr chart’s Relative Strength Index (RSI) indicator fell slightly below 60. After being in overbought territory early Thursday. Indicating that buyers had moved to the sidelines.
On the other hand 1.0820 (Fibonacci 23.6% retracement of the last rally, 20-period Simple Moving Average (SMA)) aligns as immediate support on the downside.
If the pair goes below that level and begins to use it as resistance. The downtrend might continue to 1.0760 and 1.0720. (50-period SMA).The first barrier is at 1.0850 (static level), followed by 1.0900 and 1.0930.
