EUR/USD Daily Forecast – Euro on Pace to Post Fifth Straight Day of Losses
EUR/USD has wiped a bulk of its out sized 4% gain last week as dollar bulls have dominated the week. The dollar index (DXY) has taken out important resistance over the last 24 hours and trades comfortably back above the 100.00 level.
Weaker than expected data out of Europe further weighed on EUR/USD in the early day on Friday as survey data from purchasing managers in the services industry showed a sharp contraction in activity in March.
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The services PMI index for the Eurozone in March printed at 26.4 which was even lower than the flash estimate of 28.4. In comparison, the index was in expansion for February when it hit 51.6. The composite index fell to 29.7, exceeding the lows reached during the financial crisis.
Economic data from the US has not been much better. Yesterday’s US jobless claims revealed 6.6 million new individuals filing for claims in the past week. The figure was nearly double the analyst estimate.
Later in the day, the US will release its nonfarm payrolls report. Analysts expect the unemployment rate to rise to 3.8% from 3.5% and expect the report to reveal a decline of 100 thousand jobs.
Technical Analysis
EUR/USD is on pace to post a loss every single day this week which downplays the bullish implications of last week’s rise.
The pair was last seen attacking the 1.0800 level which was previously responsible for triggering a notable turn higher in February.
In the event the pair continues to decline from here, further support is seen at 1.0657 which served to hold the pair higher on a daily basis last month.
To the upside, resistance for the session ahead is found at 1.0890.
Bottom Line
- EUR/USD is on pace to post five consecutive days of losses and is probing the 1.0800 level.
- The US jobs report is expected to show a deterioration in the labor market and a volatile reaction is expected.