EUR/USD Forecast: At Fresh 2021 Lows And At Risk Of Extending Its Slump

EUR/USD Current Price: 1.1821

• Dollar bulls ignored dismal US data, a better market mood.
• Markit EU PMIs beat expectations in March, according to preliminary estimates.
• EUR/USD at fresh 2021 lows and at risk of extending its slump.

The EUR/USD pair fell to a fresh 2021 low of 1.1811, as demand for the American currency prevailed throughout the day. Upbeat European data did little for the shared currency, while dismal US data hardly affected the greenback.  In fact, the dollar retained its strength, despite a better market sentiment during US trading hours, as stocks indexes fell sharply in Asia but closed mixed in Europe and the US. The pair stabilized around 1.1830 ahead of the US opening, ending the day around 1.1820.

Markit released the preliminary estimates of its March PMIs. The EU services PMI printed at 48.8, beating the 46 expected, while manufacturing output jumped to 62.4 from 57.9 in February. In Germany, the services index recovered into expansion territory, resulting in 50.8, while the manufacturing PMI came in at 66.6. US figures missed expectations, as manufacturing output printed at 59, while the services index came in at 60.

The US has also published February Durable Goods Orders, which resulted much worse than anticipated, falling by 1.1% against an expected 0.8% advance. The core reading resulted at -0.8% vs the 0.5% expected. In the EU, Consumer Confidence improved in March to -10.8 from -14.8.

Thursday will bring minor money figures from the EU while ECB’s President Christine Lagarde will offer a speech. The US will publish Initial Jobless Claims for the week ended March 19 and the final reading of the Q4 Gross Domestic Product.

EUR/USD Short-Term Technical Outlook

The EUR/USD pair is finishing the day below its 200 DMA for the first time since May 2020, quite a sign of bears dominance. In the near-term, and according to the 4-hour chart, the risk is skewed to the downside. The 20 SMA extends its decline, now converging with a Fibonacci resistance at 1.1885, reinforcing the strength of the level. The Momentum indicator heads south within negative levels while the RSI consolidates near oversold readings, indicating absent buying interest.

Support levels: 1.1790 1.1750 1.1710

Resistance levels: 1.1885 1.1920 1.1970  

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