- Summary:
- EURUSD has received fresh impetus from Eurozone PMI, which outperformed the US equivalent and exceeded projections.
EURUSD traded at 1.0830, on opening of the London session on Friday, after adding 0.08% to its Thursday gains. The euro is on course to enter the weekend on the uptrend against the dollar, spurred by impressive PMI figures released on Thursday. The US Initial Jobless Claims and Continuing Jobless Claims data also exceeded expectations, but gains were pulled down by lower-than-expected PMI figures.
The number of initial jobless claims in the US fell to 201,000, bettering the projected figure of 217,000. However, the positive sentiment was undone by a decline in business output. The S&P Global US Composite PMI fell in February to 51.4 from January’s 52.0. Furthermore, this was lower than the consensus forecast 51.8. However, the manufacturing PMI beat forecast, reading 51.5 versus a projected 50.5. Meanwhile, the Services PMI dragged down the overall PMI and came in at 51.3, which was lower than the projected 52.4.
The euro was boosted by the uptick in the overall PMI, which rose by 1.0 to 48.9 from January’s 47.9. Notably, the figure bettered the consensus forecast which had expected the figure to come in at 48.5. The HCOB Eurozone Composite PMI was underpinned by a significant jump in the services PMI, which rose from 48.4 to 50.0.
The euro has been on the rise against the dollar since February 14th, and has inched higher on each of the last eight trading sessions. Moreover, the EURUSD pair was rejected at a 21-day high at the 1.0889 mark, but could have another go at it on Friday, in the absence of high-impact macroeconomic data. The rise, however, could be curtailed by rising US Treasury yields. Yields on the 5-year bonds are at 4.353%, while 10-year bonds are at 4.339% at the time writing.
Technical analysis
The EURUSD currency pair has established a pivot at the 1.0840 exchange rate. As long as the resistance remains at that level, the pair could break below 1.0805, and potentially establish another support at 1.0790. However, if the bulls maintain control above 1.0840, further upside to 1.0855 will be possible. A breach of the 1.0855 resistance could propel the pair further up to test 1.0870.
