The EUR/USD had jumped fresh highs during the start of the last week, but all the gains were drained off by the end of the week following the release of the weak European PMI numbers (mainly German and Eurozone. The results shocked the investors. And with fear intact, increased selling bias over the currency lead the plunge rally thereon. The primary reason for the weak manufacturing was the combined effect of the US-China Trade War and Brexit chaos impacting the overall imports and exports of the countries.
Asian Trades opened up on Monday morning in red amidst fear of a global economic slowdown. Today, Mueller’s Report resolved the doubt prevailed between Trump and the Russia conspiracy vis-a-vis his presidentship. The US yields hovered near the last week’s low. These factors pushed down the USD Index escalating the EUR/USD pair.
Positive Economic Growth Creates Optimism
After the Thursday’s surprise deep slump in the EUR/USD pair, it could not yet hit and break the 1.1318 resistance level. On Monday morning, the pair has been following a slight reverse from the downtrend recovering earlier losses. The pair had reached 1.1311 at 07:45 GMT continuing an upward pattern showing signs of recovery.
The German IFO business climate index got published just recently. It surpassed the consensus estimate of 98.7 by 1.1 points. The current economic assessment of Germany improved from last month’s 103.4 to 103.8 points. These positive numbers entailed to the economic growth paves the way for more bulls to appear in the EUR/USD.
The pair jumped from 1.1311 to 1.1318 level following the index release at 09:00 GMT.
Key EUR/USD Influencing Upcoming Events
In the US, the Chicago Fed Activity Index and the Dallas Fed Manufacturing Index for March will be out today by around 12:30 GMT and 14:30 GMT respectively. Both the indexes are highly significant from the pair’s movement perspective. Fed activity index is expected to come around -.0.25 before the previous -0.43. It is noteworthy that the Analyst community is quite bearish on the Dallas Fed manufacturing index with a consensus estimate of 9.6 compared to the last 13.1. This can have a notable impact on the currently upward moving EUR/USD.
At the time of writing this article (10:57 GMT), the EURUSD pair was trading at 1.1314 level. Today, the pair had broken the last high resistance of 1.1319 created after the Friday’s plunge. The current trading level lies above all the major Simple Moving Averages (SMA). This depicts the development of an uptrend which would sustain and help the pair to end the day on a positive note.
This article was originally posted on FX Empire
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