- Bulls-bears tug of war amid risk-aversion, weaker US dollar.
- Focus on EMU Purchasing Managers' Indexes: Trend intact
- Next of relevance remains trade developments, US Markit PMIs and existing home sales data.
Following the sharp overnight rebound from near 1.1340 troughs, the EUR/USD pair entered a phase of consolidation in the Asian trades around the 1.1370 region, as the bears guard the 1.1385 topside barrier as we progress towards the European opening bells.
The pair appears to lack direction at the press time, although the downside remains cushioned near 1.1360 levels amid subdued trading activity seen around the US dollar, as the USD bears fight for control, despite risk-off trade in the Asian equities. A fresh round of risk-aversion hit Asia on the reports that China imposed temporary antidumping measures on some products from the European Union (EU), Japan, South Korea and Indonesia.
Meanwhile, the EUR lack the recovery momentum, as the bulls turn cautious heading into the flash manufacturing and services PMI releases from across the Euro area economies due later on from 0815 GMT onwards. The weakening Eurozone economy continues to remain the main concern for the EUR markets amid ongoing Brexit uncertainty.
“For the EU the data is critical, as concerns about slowing economic growth have limited advances for several months already. The manufacturing index is seen bouncing a bit, to 49.5, still in contraction territory, while the services index is forecasted to result at 52.7, slightly below the previous 52.8. For the US, forecasts are a bit more encouraging. The US will also release February Existing Home Sales seen u 2.2% MoM,” FXStreet’s Chief Analyst Valeria Bednarik notes.