The EUR/USD currency pair seeks positive momentum to stage an upside retracement amidst the ongoing geopolitical turbulence. The Flash Purchasing Managers Index (PMI) survey is scheduled to be released soon, and it is expected to provide some insight into the relative level of business conditions in France, Germany, the UK, and the United States of America.
Overview
The EUR/USD currency pair seeks positive momentum to stage an upside retracement amidst the ongoing geopolitical turbulence. The Flash Purchasing Managers Index (PMI) survey is scheduled to be released soon, and it is expected to provide some insight into the relative level of business conditions in France, Germany, the UK, and the United States of America. This survey comprises a range of factors such as employment, production, new orders, prices, supplier deliveries, and inventories.
High Impact Economic Events
Tuesday, 07:15 am (GMT+0): French Flash Manufacturing PMI (EUR)
Tuesday, 07:15 am (GMT+0): French Flash Services PMI (EUR)
Tuesday, 07:30 am (GMT+0): German Flash Manufacturing PMI (EUR)
Tuesday, 07:30 am (GMT+0): German Flash Services PMI (EUR)
Tuesday, 08:30 am (GMT+0): Flash Manufacturing PMI (GBP)
Tuesday, 08:30 am (GMT+0): Flash Services PMI (GBP)
Tuesday, 01:45 pm (GMT+0): Flash Manufacturing PMI (USD)
Tuesday, 01:45 pm (GMT+0): Flash Services PMI (USD)
Wednesday, 04:30 am (GMT+0): CPI q/q (AUD)
Wednesday, 04:30 am (GMT+0): CPI y/y (AUD)
Wednesday, 04:30 am (GMT+0): Trimmed Mean CPI q/q (AUD)
Wednesday, 03:30 pm (GMT+0): Advance GDP q/q (USD)
Wednesday, 03:30 pm (GMT+0): Unemployment Claims(USD)
Friday, Tentative: BOJ Policy Rate(JPY)
Friday, 03:30 pm (GMT+0): Core PCE Price Index m/m (USD)
Technical Analysis
Since March 8, when it peaked at 1.09811, the EURUSD has been in a downtrend, forming consecutive lower peaks and troughs. A technical reversal to the downside, known as a failure swing, opened the way for the decline in the exchange rate. Specifically, the peak at 1.09426 failed to exceed the previous peak, 1.09811, and as a result, the price fell below the trough at 1.08347, paving the way for a decline. The bearish momentum pushed the exchange rate to its lowest point in 2024 on April 16, recording the trough at 1.06010.
The downward outlook is also backed by the 50-period Moving Average and the Momentum oscillator. The Moving Average line is currently above the prices, and the Momentum records values below its 100 baseline. On the other hand, a possible upside correction is indicated by the Stochastics, which emerged above the 20 oversold zone.
Upside Potential Targets
If the bulls manage to take control of the market, traders may consider the following resistance levels.
1.06901: The first upside target is the high price marked on April 18. This level also coincides with the 23.6 percent Fibonacci Retracement, which is calculated from the peak of 1.09811 to the trough of 1.06010.
1.07462: The second level is 1.07462, matching the 50-period Exponential Moving Average.
1.08366: The third target is 1.08366, representing the 61.8 percent retracement from the swing high of 1.09811 to the swing low of 1.06010.
1.08851: The fourth key resistance level is seen at the peak 1.08851 marked on April 9.
Downside Potential Targets
Should the bears continue to dominate the market, there are four potential downside targets that traders may consider:
1.06010: The first downside target stands at 1.06010, representing the year's low.
1.05603: The second support is estimated at 1.05603, representing the S2 support level of the weekly Pivot Points.
1.05197: An additional potential support could be identified at 1.05197, representing the S3 support weekly Pivot Point.
1.04636: Finally, another potential target is the 261.8 percent Fibonacci Extension of the swing marked by the trough at 1.07244 and the peak at 1.08851.
Fundamentals
On Tuesday, April 23, developed economies such as the United States, the United Kingdom, the Eurozone, Japan, and Australia are expected to release their Flash Purchasing Managers' Index (PMI) figures.
The upcoming flash data is expected to offer an initial insight into the current business conditions at the beginning of the second quarter. This follows encouraging signs of an increased global growth trend and a rise in prices at the end of the first quarter.
The current state of inflation is a matter of significant concern, especially given the recent acceleration of average prices charged for goods and services to a ten-month high. The UK and US, in particular, have experienced steep price hikes, which has added uncertainty to the rate cut outlook for their respective central banks. This development has raised pertinent questions regarding the future trajectory of inflation, which could potentially impact the EUR/USD exchange rate, calling for careful monitoring and analysis.
Conclusion and Considerations
Today's Flash PMI report is expected to shed some light on the major currency pairs and, in particular, the EUR/USD, which is seeking positive momentum to stage an upside correction amid geopolitical tensions, high interest rates, persisting inflation, and global economic uncertainty.
Traders are expected to closely monitor a currency pair in light of the forthcoming release of significant economic data that could potentially impact currency valuations.