The EURUSD forex currency pair is looking to head for the highs of February after a weaker US manufacturing release.
EURUSD – Daily Chart
The price target for the EUR/USD is 1.1000 as the pair trades at 1.0903. The move higher in the euro could come as early as this week.
US manufacturing posted its worst result in almost three years as new orders slumped. Analysts fear that activity could worsen due to tighter credit conditions.
The Institute for Supply Management (ISM) survey showed a decline in the components of manufacturing PMI below the 50 thresholds for the first time since 2009. The 50 level is the difference between expansion and contraction. Some economists have said this could mean a recession was coming, and Monday’s OPEC production cut worsened that situation.
The ISM manufacturing PMI index fell to 46.3 last month, marking the lowest level since May 2020 at the height of the covid market panic.
EURUSD Forecast
EURUSD may trend higher this week, and Friday will be the release date for the latest Non-Farm Payrolls number. Analysts expect a print of 240k jobs after last month’s 311k upside surprise.
Meanwhile, European Central Bank president Christine Lagarde said underlying inflation in the region was still “significantly too high” – even after the index dropped by the most on record this month. Core inflation moved to an all-time high in March of 5.7%. However, the headline number dropped to 6.9% from 8.5%.
On Friday, the central bank still has “ground to cover” to get prices back to its 2% target Ms Lagarde said. The 3.5% rate hikes that the bank conducted since last summer “is beginning to work,” she added.
Traders can look for the EURUSD to move towards the strong resistance of 1.1000. The price action there could determine the next significant trend for the exchange rate.
