EUR/USD is trading near its lows since Mar 1 today. After positive fundamentals in the US and very weak data in the Eurozone, the market became clear in being favorable to the dollar. This week, important macroeconomic events are scheduled for Thursday and Friday, hence the market will be consolidating within the next few days.
In the meantime, there were two events in the US that supported the USD. The preliminary Industry Business Climate Index by Markit rose to 56.5, against the expectations at 55.2 and the previous mark at 55.6. The Service Markit Index also rose, but not so high, moving from 54.00 to 54.40. However, in the breakdown by components, one can easily see new order volume grow, which makes the entire indicator increase.
Another news that supported the greenback were the existing home sales that increased to 5.6M, against the expectations at 5.55M. With the supply being rather tight and the loan interest rising, the demand in real estate is still high, as people try to buy homes now, before the price has gone up way too high. In the meantime, the EUR was weak with the mixed data on private sector business activity.
Today is a rather quiet day in terms of fundamental releases, although March new building permits are scheduled later today in the US; with this indicator showing high demand, too, the US dollar may become even stronger.
Technically, EURUSD is still correcting inside a descending channel. The current trend consists of two channels, a broad mid term channel, and a tight short term one. As of now, the price is aiming to the short term channel support at 1.2167. While testing this support, the pair may start trading sideways. However, once the support gets broken out, the price may fall to the mid term channel support at 1.2025. Then, a new ascending move may form, aiming to the resistance at 1.2350.
By Dmitriy Gurkovskiy, Chief Analyst at RoboForex
Disclaimer:
Any predictions contained herein are based on the authors' particular opinion. This analysis may not be treated as trading advice. RoboForex shall not be held liable for the results of the trades arising from relying upon trading recommendations and reviews contained herein.