Yesterday’s trade saw EUR/USD within the range of 1.1153-1.1219. The daily low has also been the lowest level since January 26th, when a low of 1.1098 was recorded. The pair closed at 1.1176, losing 0.07% on a daily basis.
At 8:49 GMT today EUR/USD was down 0.41% for the day to trade at 1.1130. The pair broke the first key daily support level and touched a daily low at 1.1126 at 8:47 GMT.
Fundamentals
Euro area
Services PMI by Markit – final estimate
The final services PMI in the Euro area probably confirmed the preliminary value for February, with the index remaining at 53.9. If so, this would be the highest PMI level since July 2014, when the gauge was reported at a final 54.2. It would also be the 19th consecutive month, during which the index inhabited the area above 50.0. In January the index came in at 52.7, according to final data. The Purchasing Managers Index is based on a monthly survey, encompassing a sample of approximately 2 000 business entities, which represents private sector conditions in terms of new orders, output, employment, prices etc. National services data are included for Germany, France, Italy, Spain and the Republic of Ireland. Readings above the key level of 50.0 indicate optimism (increasing activity). Higher-than-expected values of the PMI would support demand for the common currency. The final reading is scheduled to be released at 9:00 GMT.
Retail Sales
Annualized retail sales in the Euro region as a whole probably rose 1.9% in January, according to the median forecast by experts, after in December sales climbed at a pace of 2.8%. The latter has been the fastest annual sales growth rate since March 2007. If so, January 2015 would be the 13th consecutive period of growth. In monthly terms, retail sales probably remained flat during January, following a 0.3% gain in December. This is a short-term indicator, which provides key information about consumer spending trend on a national scale. In case the index of retail sales rose 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.
United States
Change in employment by ADP
Employers in the US non-farm private sector probably added 220 000 new jobs during February, according to the median estimate by experts, following 213 000 new positions added in January. The latter has been the lowest gain in jobs since August 2014, when 202 000 jobs were added. The employment report by Automated Data Processing Inc. (ADP) is based on data that encompasses 400 000 – 500 000 companies employing over 24 million people, working in the 19 major sectors of the economy. The ADP employment change indicator is calculated in accordance with the same methodology, which the Bureau of Labor Statistics (BLS) uses. Published two days ahead of the governments employment statistics, this report is used by traders as a reliable predictor of the official non-farm payrolls data. Creation of jobs has a direct link to consumer spending, while the latter is a major driving force behind economic growth. In case new jobs growth came above expectations, this would bolster demand for the US dollar. The official figure is scheduled to be published at 13:15 GMT.
ISM Non-Manufacturing PMI
Activity in United States’ sector of services probably was little changed in February, with the corresponding non-manufacturing PMI coming in at a reading of 56.5, according to expectations, down from 56.7 in January. If so, February would be the 61st consecutive month, when the gauge stood in the area above 50.0. 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 supplier deliveries.
The business report is based on data compiled from monthly replies to questions asked of over 370 purchasing and supply executives operating in over 62 different industries, which represent nine divisions from the Standard Industrial Classification (SIC) categories.
Participants can either respond with “better”, “same”, or “worse” to the questions about the industry, in which they operate. The resulting PMI value is measured from 0 to 100. If the index shows a value of 100.0, this means that 100% of the respondents reported an improvement in conditions. If the index shows a value of 0, this means that 100% or the respondents reported a deterioration in conditions. If 100% of the respondents saw no change in conditions, the index will show a reading of 50.0. Therefore, readings above the key level of 50.0 are indicative of optimism (expanding activity). In case, however, the index fell more than anticipated, this would lead to a sell-off of the US dollar. The Institute for Supply Management (ISM) is to release the official PMI reading at 15:00 GMT.
Pivot Points
According to Binary Tribune’s daily analysis, the central pivot point for the pair is at 1.1183. In case EUR/USD manages to breach the first resistance level at 1.1212, it will probably continue up to test 1.1249. In case the second key resistance is broken, the pair will probably attempt to advance to 1.1278.
If EUR/USD manages to breach the first key support at 1.1146, it will probably continue to slide and test 1.1117. With this second key support broken, the movement to the downside will probably continue to 1.1080.
The mid-Pivot levels for today are as follows: M1 – 1.1099, M2 – 1.1132, M3 – 1.1165, M4 – 1.1198, M5 – 1.1231, M6 – 1.1264.
In weekly terms, the central pivot point is at 1.1262. The three key resistance levels are as follows: R1 – 1.1349, R2 – 1.1502, R3 – 1.1589. The three key support levels are: S1 – 1.1109, S2 – 1.1022, S3 – 1.0869.
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