- Euro rose on upbeat EU PMIs, fell after US PMIs beat expectations.
- ECB rate call due during Thursday market session, Friday to wrap up with US PCE inflation.
- EUR/USD gets hampered by 200-hour SMA.
EUR/USD rose to a near-term high above 1.0930 on Wednesday after European Purchasing Managers’ Index (PMI) figures surprised to the upside on the manufacturing component, while a broad forecast beat for US PMI data soured market sentiment and sent the EUR/USD lower as investors second-guessed the day’s momentum and pulled back into the safe-haven US Dollar (USD), albeit slightly.
HCOB PMIs for the pan-European economy mixed on Wednesday as investors chose to focus on the PMI Manufacturing component which rose to 46.6 in January, above the forecast increase to 44.8 from December’s 44.4. The Services component of the PMI declined to 48.4 from the previous 48.8, entirely missing the forecast uptick into 49.0.
US: Flash PMIs surprise to the upside in January
The Euro (EUR) rallied against the USD after investors took upbeat manufacturing figures to heart despite the PMI still printing in contractionary territory below the 50.0 level, a barrier the EU Manufacturing PMI has not printed above in almost two years.
The US S&P Global PMIs broadly came in above expectations as the US economy continues to outperform forecast models. January’s Manufacturing PMI climbed to an 11-month high of 50.3, returning to growth territory above 50.0 for the second time in four months and easily clearing the forecast steady print at 47.9 in December.
The US Services PMI component also climbed above expectations, printing at 52.9 versus the forecast backslide from 51.4 to 51.0. With US PMIs cleanly beating the street, investors are getting knocked back once again from rate cut hopes as a firming US economy makes the Federal Reserve (Fed) less likely to panic and begin cutting rates earlier than expected. Market-wide bets of a March rate cut from the Fed are now below 40% according to the CME’s FedWatch tool, down from around 80% just a month ago.
ECB Preview: Forecasts from 12 major banks
Thursday brings another rate call and monetary policy statement from the European Central Bank (ECB), and markets will be keeping a close eye on the extend of the ECB’s hawkish or dovish stance after ECB policymarkers worked double duty in recent days to talk down market hopes for an early rate cut before the summer months.
The trading week will cap things off with another print of the US’ Personal Consumption Expenditure (PCE) Price Index on Friday, which is expected to tick upwards MoM in December from 0.1% to 0.2%, and the annualized figure is seen ticking down from 0.1% to 0.2%.
EUR/USD Technical Outlook
The EUR/USD saw a sharp rejection after climbing through the 200-hour Simple Moving Average (SMA) near 1.0895, peaking at a near-term intraday high above 1.0930 before getting forced back down and settling Wednesday near the familiar 1.0880 level.
The EUR/USD is trading into a heavy congestion zone between the 50-day and 200-day SMAs near 1.0925 and 1.0850 respectively, and the pair is set to continue grinding out near-term consolidation between the two key technical barriers.
EUR/USD Hourly Chart
EUR/USD Daily Chart
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD stays below 1.0800 after upbeat US data
EUR/USD struggles to gain traction and trades below 1.0800 in the American session on Wednesday. Upbeat February Durable Goods Orders data from the US support the US Dollar in the second half of the day, making it difficult for the pair to stage a rebound.
GBP/USD drops to fresh two-week lows below 1.2900
GBP/USD remains under pressure and trades at a fresh two-week low below 1.2900 in the American session on Wednesday. Soft February inflation data from the UK and the Spring Budget delivered by Chancellor Rachel Reeves weigh on Pound Sterling midweek.
Gold clings to modest daily gains above $3,020
Gold fluctuates in a relatively tight range and manages to hold above $3,020 midweek. The precious metal seems to be benefiting from the positive sentiment surrounding the commodities after Copper climbed to a new all-time high earlier in the day.
Bitcoin holds $87,000 as markets brace for volatility ahead of April 2 tariff announcements
Bitcoin (BTC) holds above $87,000 on Wednesday after its mild recovery so far this week. A K33 Research report explains how the markets are relatively calm and shaping up for volatility as the market absorbs the tariff announcements.
Sticky UK services inflation shows signs of tax hike impact
There are tentative signs that the forthcoming rise in employer National Insurance is having an impact on service sector inflation, which came in a tad higher than expected in February. It should still fall back in the second quarter, though, keeping the Bank of England on track for three further rate cuts this year.
The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.