EUR/USD daily chart with support and resistance lines on it. Click to enlarge:
- Eurozone Trade Balance: Monday, 9:00. The eurozone’s trade surplus narrowed to EUR 17.3 billion in January, down from EUR 22.2 billion a month earlier. This missed the estimate of EUR 19.3 billion. The surplus is projected to improve to EUR 19.2 billion in February.
- German ZEW Economic Sentiment: Tuesday, 9:00. Institutional investors were deeply pessimistic in March, as the indicator plunged to -49.5 points, down from +8.7 points in February. Another weak reading is expected, with an estimate of -40 points. The all-eurozone indicator slipped to -49.5 in March and the April forecast stands at -38.2 points.
- Eurozone Consumer Confidence: Wednesday, 14:00. The eurozone consumer remains pessimistic about economic conditions. The indicator slipped to -12 in March, down from -7 a month earlier. The downturn is expected to continue in April, with an estimate of -20 points.
- German GfK Consumer Climate: Thursday, 6:00. German consumer confidence slowed to 2.7 points in February, down from 9.8 in January. This was well short of the estimate of 7.4 points. The March estimate stands at -2 points.
- PMIs: Thursday, 7:15 in France, 7:30 in Germany, and 8:00 for the whole eurozone. Services PMIs continue to indicate deep contraction and weakened in March. In April, the German PMI is projected to come in at 29.0, the eurozone PMI is expected at 24.9 and the French PMI at 25.1 points. Manufacturing PMIs have been stronger, with readings near the 40-level, but this still points to contraction. In April, the eurozone PMI is expected at 39.4, the German PMI at 39.0 and the French index at 37.9 points.
- German Ifo Business Climate: Friday, 8:00. Business confidence dipped to 86.1 in March, down from 87.7 a month earlier. This missed the estimate of 87.9 points. We now await the April release.
EUR/USD Technical analysis
Technical lines from top to bottom:
We start with resistance at 1.1215, which has held since mid-January. 1.1119 is next.
1.1025 (mentioned last week) has some breathing room in resistance.
1.0900 is an immediate resistance level. It could see action early next week.
1.0829 is providing support.
The round number of 1.07 is next.
1.0620 is protecting the 1.06 level. It is the final support level for now.
I remain bearish on EUR/USD
The eurozone economy has been hard hit by the Corvid-19 virus, especially Italy and Spain. EUR/USD is down 1.4% in April. Economic numbers are expected to worsen in April, as this month’s data will reflect the Covid-19 outbreak, which hit Europe in March. This does not bode well for the euro.