Forex Market: EUR/USD daily outlook

During yesterday’s trading session EUR/USD traded within the range of 1.3753-1.3820 and closed at 1.3767.

At 7:39 GMT today EUR/USD was gaining 0.02% for the day to trade at 1.3769. The pair touched a daily high at 1.3773 at 7:12 GMT.

Fundamental view

Euro zone

The final reading of Frances Services PMI in March probably matched the preliminary value at 51.4, which was released on March 24th. Readings above the key level of 50.0 are indicative of expansion in activity. Higher than expected values would provide support to the euro. Markit is to report the official value at 8:50 GMT.

The final reading of Germanys Services PMI in March probably also met the preliminary value at 54.0. The official reading is to be released at 8:55 GMT.

The final reading of Euro zones Services PMI probably coincided with the preliminary value at 52.4 last month. In case market expectations are exceeded, this will boost demand for the single currency. Markit Economics will report the official value at 9:00 GMT.

Annualized retail sales in the Euro region as a whole probably rose 0.8% in February, according to the median forecast of experts, after in January sales climbed 1.3%. In monthly terms, retail sales probably dropped 0.6% during February. This is a short-term indicator, which provides key information about consumption on a national scale. In case the index of retail sales rises at a faster than projected pace, this would have a bullish effect on the euro. Eurostat is expected to publish the official data at 10:00 GMT.

At 12:45 GMT the European Central Bank will announce its decision on borrowing costs. The benchmark interest rate will probably be left unchanged at 0.25% at the policy meeting, according to the median estimate by experts. A cut in rates further would have a bearish effect on the euro.

The decision on policy will be followed by a press conference with ECB President Mario Draghi, scheduled at 13:30 GMT. Market volatility during this event is usually high.

United States

The number of people in the United States, who filed for unemployment assistance for the first time during the week ended on March 28th, probably increased to 317 000 from 311 000 in the prior week. In case the number of initial jobless claims increases more than projected, this would have a bearish effect on the greenback. The Department of Labor is to release the weekly report at 13:30 GMT.

The deficit on US trade balance probably narrowed to 38.500 billion USD during February from a deficit of 39.095 billion USD, registered in January. The trade balance, as an indicator, measures the difference in value between countrys exported and imported goods and services during the reported period. It reflects the net export of goods and services, or one of the components to form countrys Gross Domestic Product. In case the trade balance deficit shrinks more than expected, this would provide support to US dollar. The Bureau of Economic Analysis will release the official numbers at 13:30 GMT.

Activity in United States sector of services probably expanded during March, with the corresponding non-manufacturing PMI coming in at a reading of 53.5, according to expectations, from 51.6 in February. This is a compound index, based on the values of four equally-weighted components, that comprise it. These sub-indexes reflect seasonally adjusted new orders, seasonally adjusted employment, seasonally adjusted business activity and shipments. Readings above the key level of 50.0 are indicative of expanding activity. In case market expectations are exceeded, US dollar would be boosted.

Technical view

According to Binary Tribune’s daily analysis, in case EUR/USD manages to breach the first resistance level at 1.3807, it will probably continue up to test 1.3847. In case the second key resistance is broken, the pair will probably attempt to advance to 1.3874.

If EUR/USD manages to breach the first key support at 1.3740, it will probably continue to slide and test 1.3713. With this second key support broken, the movement to the downside will probably continue to 1.3673.