EURUSD, H1
EURUSD posted a three-day low at 1.1353, subsequently lifting through the 20-period moving average to around 1.1380-85. Lower than expected Eurozone unemployment, which fell to a 10-and-a-half-year low 7.8% rate, and a slight upward revision to the final February reading of the Eurozone manufacturing PMI survey helped EURUSD find a footing. Overall, we take a bearish-leaning view of EURUSD.
Stronger than expected US GDP data, which rose 2.6% q/q in Q4, improved the Dollar’s yield differential advantage and tips the balance of EURUSD’s bearish-bullish scales back toward the bearish side. In the Eurozone, there are concerns about a possible US tariff hike on automobiles imported from the Eurozone, while there have been widespread signs of overall flagging growth momentum, which has rekindled dovishness at the ECB (Weidmann and some others excepted). There are also plans for US trade representative Lighthizer and his EU counterpart Malmstrom to meet next week on March 6, with automobile tariffs inevitably top of the agenda.
EURUSD next key resistance is the psychological 1.1400 zone and R1. Support is the daily pivot point at 1.1380, 1.1360 the 200-period moving average, and S1 at 1.1346. The Crossing EMA Strategy would have triggered long at 13:00 with a Stop Loss below the turn at the 200-period EMA, T1 at 1.1383 and T2 at 1.1396. Still to come today, Canadian GDP for December, US PCE and Personal Income data and most significantly the ISM Manufacturing PMIs which are expected to fall to 55.5 from a strong 56.6 last time.
Stuart Cowell
Head Market Analyst
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