EUR/USD stays in range below 1.14 ahead of PMI data

• PCE price index rose 0.1% in December in the U.S.
• Markit Manufacturing PMI for the euro area stays below 50 in the final reading.  
• Coming up: ISM and Markit Manufacturing PMI and UoM Consumer Confidence Index from the U.S.

After dropping to the 1.1350 area earlier in the day, the EUR/USD pair staged a modest recovery in the last hour and turned positive on the day. As of writing, the pair was up 0.1% on the day at 1.1380.

Earlier today, the IHS Markit announced that the euro area Manufacturing PMI at 49.3 in February’s final reading confirmed that the business activity in the manufacturing sector contracted during that month. Commenting on the data, “Euro area manufacturing is in its deepest downturn for almost six years, with forward-looking indicators suggesting risks are tilted further to the downside as we move into spring,” said  Chris Williamson, Chief Business Economist at IHS Markit. Other data from the euro area showed that the unemployment rate stayed unchanged at 7.8% in January.

On the other hand, today’s data from the U.S. revealed that inflation, as measured by the core PCE Price Index, rose 0.2% and 1.9% on a monthly and yearly basis, respectively, to match analysts’ estimates. Ahead of the IHS Markit’s and the ISM’s Manufacturing PMI data, the US Dollar Index is adding 0.07% on a daily basis at 96.30. Later in the session, Atlanta Fed President Raphael Bostic is scheduled to deliver a speech as well.

Technical levels to watch for  

The pair could face the initial resistance at 1.1390 (50-DMA) ahead of 1.1420 (Feb. 28 high) and 1.1460 (Feb. 4 high). On the downside, the immediate support aligns at 1.1375 (100-DMA), 1.1330 (20-DMA) and 1.1275 (Feb. 19 high).