The EURUSD exchange rate is set to move on European economic data on Friday, following a recent failure in its uptrend.
EURUSD – Daily Chart
The EURUSD is trading back within a familiar range after the failure to hold the 1.1900 level. Weaker data could target the 1.1580 level ahead of 1.5000.
Recent weakness will likely remain the dominant theme ahead of the data at 3:30 pm HKT and 4 pm. The first batch of PMI data will come from Germany, where analysts project a small improvement to a combined reading of 0.1.
That will be driven by stronger manufacturing gains, alongside a weaker services sector. The European numbers will be the opposite, with a 0.4 gain in services against weaker manufacturing.
Analysts would need to see a surprise upside in one or both of the data sets to push the euro higher. Further economic weakness could bring the pair closer to previous support levels near 1.1500.
According to the February Euro indicators data, euro GDP expanded by just 0.3% in the fourth quarter, matching the previous quarter and highlighting a persistent low-growth environment across the bloc.
On the other side of the pairing, we have a reduced expectation for interest rate cuts and the threat of a conflict between the US and Iran.
US President Donald Trump has given Iran a 10-day deadline to agree to a deal on its nuclear ambitions after a meeting with his top advisers. The update came after a top US ally warned that the President is set to strike Tehran “within hours”.
Stocks and anti-dollar currencies remain on edge as tensions persist, while the latest FOMC minutes from the Federal Reserve also added to the dollar’s strength.
“Most participants noted further rate cuts could add to the risk of higher inflation becoming entrenched or could be misinterpreted as a lack of commitment to the 2% inflation objective,” the minutes said.
The euro will need to see an economic improvement to halt the recent slide from above 1.1900.
