Eurusd rises amid mixed economic data and sentiments in us and eurozone

EURUSD Analysis

Performance after Tuesday
Period	Pct	Chg	Momentum
Tuesday	0.3%	35 Pips
Week to-date	1.07%	122 Pips
March	-2.33%	-275 Pips

Upcoming key events (London Time)

Wed 12:30 PM USD PPI excluding Food and Energy sectors (12-mth)
Wed 06:00 PM USD Fed Interest Rate Decision (Federal Funds Rate)
Wed 06:00 PM USD FOMC Economic Projections
Wed 06:00 PM USD Interest Rate Projections – 2nd year
Wed 06:00 PM USD Interest Rate Projections
Wed 06:00 PM USD Interest Rate Projections – Longer
Thu 01:15 PM EUR ECB Interest Rate on main refinancing operations (MRO)
Thu 01:15 PM EUR ECB Interest Rate on deposit facility

What happened lately

In the United States, there are several economic developments to consider. The Monthly Treasury Budget Statement for January dramatically decreased to -$308 billion from -$95 billion in December. This indicates a significant increase in government spending or reduction in revenue, which could imply fiscal challenges. On a positive note, U.S. Pending Home Sales increased by 1.8% in February, recovering from a decrease of 0.8% in the previous month, suggesting a potential rebound in the housing market. However, U.S. Industrial Production decreased to 0.2% in February from 0.7% in January, which might signal weakening manufacturing activities. Additionally, the New York Empire State Manufacturing Index fell to -0.2 points in March from 7.1 points in February, highlighting a slight contraction in manufacturing activity within the state.

In the Euro Area, the ZEW Survey on Economic Sentiment for March reported a significant drop to -8.5 points versus 39.4 points in February, indicating a steep decline in economic confidence across the region. Germany’s economic data showed mixed results; the ZEW Survey – Economic Situation improved slightly to -62.9 points in March from -65.9 points in February, suggesting an incremental improvement in the perception of Germany’s economic conditions. Contrarily, Germany’s ZEW Indicator of Economic Sentiment plummeted heavily to -0.5 points in March from 58.3 points in February, indicating a sharp downturn in economic outlook sentiment.

For the EURUSD currency pair, these economic conditions suggest a complex scenario. The Euro has been affected by the significant decline in economic sentiment in the Eurozone, especially in Germany, which is one of its largest economies. This could place downward pressure on the Euro. Meanwhile, mixed data from the U.S., such as the decline in the manufacturing index and increased government deficit, present a nuanced picture but may not exert substantial upward pressure on the U.S. dollar. However, upcoming events like the U.S. Federal Reserve’s interest rate decision and economic projections, and the ECB’s monetary policy announcements, will be crucial in determining the currency pair’s direction. If the Fed signals a rate hike, this could strengthen the USD, whereas dovish ECB policy measures could further weaken the EUR, influencing the EURUSD downward. Conversely, if the ECB surprises with a hawkish stance, the Euro could gain more ground against the USD.

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What can we expect from EURUSD today?

EURUSD on Tuesday rose 0.3% to 1.15380. Price is below 9-Day EMA while Stochastic is rising in oversold zone.

Updated daily direction for EURUSD looks bullish as the pair ended higher after Tuesday trading session.

Looking ahead for the day, immediate upside resistance level is R1 at 1.15683 with break above could target R2 at 1.15987 or figure level area. While towards the downside, we are looking at daily low of 1.14650 as an important support. Break below this level could weaken the current bullish momentum. A break above 1.15470 may suggest continuation after recent positive movement.

For the week to-date, take note that EURUSD is mixed as compared to the prior week.

Key levels to watch out: