fundamental News - EUR/USD

European figures were worrisome, as preventive lockdowns continue in the Union, with some countries extending them into April. Two particular macroeconomic figures sounded the alarm. January Retail Sales plummeted in Germany and the EU, while services output remained in contraction territory in February, according to Markit. Slow progress in covid immunization in the EU adds to the gloom perspective. Inflation in Germany picked up, but that of the euro area remained subdued in February, according to preliminary estimates.

In the US, the official ISM Manufacturing PMI jumped to 60.8 in February, but the services index resulted at 55.3, down from 58.7 previously. Employment-related data resulted upbeat, as the February Nonfarm Payroll report showed that the country added 379K new positions, more than doubling the market’s expectations. Still, the country has roughly 9.6 million jobs in order to return to pre-pandemic employment levels.

The European Central Bank decision on monetary policy will be the most relevant event next week. Policymakers will likely keep rates on hold but could step up the pace of assets purchases to counter rising bond yields, which could hurt growth prospects.

Technical analysis
The EUR/USD pair trades at daily lows in the 1.1970 price zone, hovering around a Fibonacci level in the 1.1970 area and near the February’s low at 1.1951. The near-term picture indicates that the pair may extend its decline heading into the Nonfarm Payroll release. The 4-hour chart shows that the pair accelerated south after meeting sellers around a bearish 20 SMA, which heads firmly lower below the larger ones. Technical indicators have turned south within negative levels, with the RSI near oversold readings, in line with another leg south.



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