EUR/USD has pulled back from its two-week high of 1.1880 to trade at 1.1868. The pair is consolidating ahead of PMI numbers from Europe. To begin with, Germany’s services PMI in March is expected to be at 50.8 compared to the previous month’s 45.7. Analysts also expect Italy and Spain’s services PMI to surpass the prior month’s readings.
At the Eurozone, the forecasted services PMI of 48.8 is higher than February’ 45.7. Better-than-expected figures will improve the region’s economic outlook at a time when the continent is struggling with overwhelming COVID-19 cases.
Besides, investors are keen on the FOMC minutes from the March meeting later in the day. The minutes will shed on the Federal Reserve’s outlook on inflation. EUR/USD will also be reacting to the dynamics of the US treasury yields and greenback. The 10-year yield has eased to 1.66, down from last week’s record high of 1.77.
EUR/USD Technical Outlook
EUR/USD hit a two-week high on Tuesday at 1.1880 with an RSI of 80. However, it has since dropped to trade at its current 1.1868. On a one-hour chart, the pair has formed a bearish flag. It is likely to continue trading between 1.1880 and 1.1860 as the market waits for PMI numbers from various European countries.
Depending on the outcome, the bulls may then push EUR/USD higher to 1.1900. It is likely to experience some resistance at this point before moving further to 1.1950. On the flip side, the pair may drop and find support at 1.1850. A move further down will have the next targets at 1.1800 and 1.1750.