Weak PMI Readings
The latest set of PMI data out of the eurozone this morning has painted a mixed picture for the single customs union. The manufacturing PMI for the overall eurozone was seen rising to 48.3 from 46.5 prior. The reading was above the 46.2 the market was looking for but shows that the sector remains in contractionary territory. The services PMI, meanwhile, was seen falling to 50.4 from 50.6 prior, below the 51.2 the market was looking for. With the factory sector in the red and the non-factory sector clinging to growth territory, there was little to drive a rally in EURUSD today. News that the German composite PMI hit a 10-month highs was perhaps the most positive aspect of today’s data.
Tariff Risks
Looking ahead, EURUSD remains vulnerable to fresh downside given the upcoming tariff risks the bloc is facing. Trump’s US tariff ‘liberation day’ on April 2nd presents key headwinds for the bloc and with the prospect that we see USD turning higher again on upside inflation risks, EURUSD could come under heavy selling pressure.
ECB Speakers
This morning, ECB’s Cipollone made the case for further ECB easing noting his belief that the bank will reach its inflation target quicker than expected. Over the week, we’ll have more ECB speakers to monitor with any further dovishness likely to weigh on EURUSD near-term.
Technical Views
EURUSD
For now, the rally in EURUSD has stalled into the 1.0931 level and the retest of the broken bull trend line. With momentum studies weakening, a deeper correction lower can be seen though the broader bull view remains while price holds above 1.0724.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.