Solid News
Business Activity in the EU Manufacturing Sector is Declining Again
3/27/2023 12:03 PMAfter an active decline on Friday, the EUR/USD pair is trading around the level of 1.0766.
The pressure on quotes was exerted by poor macroeconomic statistics: German March Manufacturing PMI corrected to 44.4 points from 46.3 points, worse than analysts' forecasts of growth to 47.0 points, which led to negative dynamics of the EU index to 47.1 points from 48.5 points earlier against expectations of strengthening to 49.0 points. Today, the focus of European investors will be the February statistics on the dynamics of consumer lending in the EU, where forecasts suggest a correction of the value from 3.6% to 3.4% YoY. Also during the day, will be released a report on business optimism and economic expectations in Germany from the Institute for Economic Research (IFO) for March, where the figure may be adjusted from 91.1 points to 90.9 points.
The American currency slightly improved its position, being traded today at 102.700 in the USD Index. After the interest rate at the last meeting of the US Federal Reserve was increased by 0.25%, representatives of regional banks began to speak out about the impact of the tightening policy on the financial sector, which is currently experiencing serious difficulties. Thus, the head of the Federal Reserve Bank (FRB) of Minneapolis, Neil Kashkari, warned that further tightening is doubly dangerous, as it accelerates the onset of a recession and increases pressure on credit institutions, whose failures could contribute to a significant economic downturn. Nevertheless, the official stressed that the US financial system is reliable and, with timely measures by the authorities, should withstand the challenges.
On the daily chart, the trading instrument continues its corrective movement within the global ascending corridor with dynamic boundaries 1.0570–1.1200.
Technical indicators keep the signal for continued growth: fast EMAs on the Alligator indicator expand the range of fluctuations upwards, and the AO histogram forms upward bars, rising in the buying zone.
Resistance levels: 1.0860, 1.1030. | Support levels: 1.0710, 1.0520.