EURUSD Rises on Positive Manufacturing and Inflation Data

Summary:
• The Eurozone's CPI and manufacturing PMI figures beat expectations, and EURUSD is now on the driver's seat as market awaits US PMI release.

The euro was 0.10% higher against the dollar at 10.00 am UTC on Friday, as EURUSD traded at 1.0810. The currency pair has been boosted by forecast-beating manufacturing PMI and consumer inflation figures released on Friday. However, its trajectory could change as more high-impact data comes out.

EURUSD fell marginally in the hours following lower-than-expected macroeconomic data releases from the United States. The market adopted a risk-off approach to the pair, guided by sentiment surrounding the Eurozone’s struggling economies. However, the economic block has proven to be on a recovery path after the HCOB Eurozone Manufacturing PMI rose in February to 46.5, beating the forecast 46.1.

Also, the preliminary Consumer Price Index (CPI) figure printed at 2.6%, beating the consensus forecast of 2.5%. These underpin the general feeling that the ECB will not be in a hurry to trim the current interest rates, as they seem to be achieving the intended results.

The Eurozone has exhausted its key macroeconomic data releases for the week and the ball is now on the dollar’s court as data comes from the United States. The US will release a series of high-impact data, headlined by S&P Global Manufacturing PMI, ISM Manufacturing PMI and ISM Manufacturing Prices. Furthermore, three FOMC members will speak later on Friday, which could provide cues on the EURUSD trajectory next week. The US dollar already had bearish sentiment bubbling under it after registering lower-than-expected Initial Jobless Claims and Core PCE Price Index figures. Therefore, the PMI data release could either see it recover some losses or hemorrhage.

Technical analysis

EURUSD currently lacks upside momentum as indicated on the RSI indicator. The pivot is at 1.0825, and the bearish momentum will favour trading below the pivot mark, with the first support at 1.0795. If they retain control beyond that level, they could build momentum to target 1.0780.  Alternatively, the buyers could push back to move above 1.0825, from where they will likely encounter resistance at 1.0835. Extended control by the buyers beyond that point could see the pair the resistance and target 1.0850.