EUR/USD has reacted to upbeat PMIs with a bounce from four-month lows, which may serve as a new sell opportunity due to the euro continues facing dark clouds, Yohay Elam, an Analyst at FXStreet, reports.
See: EUR/USD to plummet towards Fibonacci marker at 1.1695 – DBS Bank
Key quotes
“Markit’s preliminary Purchasing Managers’ Indexes for March have smashed estimates, showing that businesses are upbeat about the upcoming recovery. The composite eurozone PMI topped 50 for the first time since September – finally pointing to growth. However, that may be a rosy view.”
“Germany, France and Italy have recently extended or reimposed restrictions due to a new wave of COVID-19 infections, hospitalizations and deaths. Citizens are growingly frustrated with lockdowns and with the EU’s handling of vaccines.”
“Officials at the bloc are mulling new curbs on exports of jabs and also raw materials, potentially resulting in fewer doses to go around. While talks with Britain may end in compromise, the picture is far from positive for the eurozone and the common currency.”
“Democrats may push for tax hikes, which dampen the market mood and push the safe-haven dollar higher. Moreover, the greenback is rising despite lower yields. Raising taxes means less debt issuance, and thus lower returns on Treasuries.”
“Immediate support awaits at 1.1812, followed by 1.1750 and 1.1690 last seen in November. Resistance is at 1.1875, a cushion from recent days, followed by 1.1910 and 1.1950.”
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