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Economic Events Outlook, Mar 25 – How to Trade The EUR/USD Today?

Posted Monday, March 25, 2019 by
Arslan Butt • 2 min read
  • The US dollar traded lower on Monday in Asian session after a closely-watched measure for recession arrived on Friday.
  • Trade talks between China and the United States stay in the limelight.
  • German Ifo Business Climate is ready to bring some action today. How to trade the EUR/USD?

On Monday, the Greenback trimmed lower in the Asian session after a weaker than forecast economic event appeared on Friday. The US dollar index that gauges the Greenback’s strength against a basket of other currencies plunged down 0.1% to $96.120. The index also trades lower over the nature of dovishness held by the Federal Reserve. Where the Fed surprised the market through declaring no rate hikes sentiment in 2019.

Besides, the US 10-year bond yields slumped to 2.44%, the lowest since early last year. It’s a sign that shows investors strongly believe no additional rate hike is coming in 2019.

On the fundamentals front, investor focus remains on the German Ifo Business Climate as it’s most likely to shake the Euro today.

German Ifo Business Climate – Will it Lead Towards Economic Recovery?

Today at 9:00 (GMT), the most crucial data release will be the Ifo index. Some forward-looking measures for global activity have begun to drop lately, especially the manufacturing and the services PMI data from the Eurozone which have been miserable. This is undoubtedly going to impact other economic indicators as well. The German ZEW economic sentiment also showed signs of destabilization as it’s been dropping from 103.8 points in September 2018 to 98.5 in February 2019.

For all those who are wondering what Ifo Business Climate is, it’s a leading indicator and can help predict the upcoming trends in the Euro. It’s a survey of about 7K businesses which asks respondents to rate the relative level of current business conditions and expectations for the next six months.

A rebound of the Ifo index would support the single currency Euro. The figure of 98.7 is on the cards now.

EUR/USD – Miserable Manufacturing & Services PMI Figures in Play

The Eurozone’s miserable Flash Manufacturing & Services Purchasing Managers Index (PMI) figures cast a pall over the single currency Euro. The data proves that the European economies are struggling as the manufacturing and services PMI figures got even worse than previous month.

Germany, France, and Italy, the three biggest economies in the Eurozone, hardly grew during the previous month. While the market sentiment indicators are going sick.

EUR/USD – Technical Outlook

  • Technically, EUR/USD is consolidating in a thin trading range of $1.1310 – $1.1270.
  • The RSI and Stochastics are in the oversold zone, sending a signal that there’s no room for selling until we see a retracement.
  • The 20 periods EMA is indicating a bearish trend in the EUR/USD.
  • On the 4-hour timeframe, the pair is gaining support above $1.1280 with resistance around $1.1320 and $1.1340.
  • The bearish breakout of this pattern can lead the direct currency pair towards $1.1265. While we may see the pair soaring towards $1.1340 above $1.1305.

Daily Technical Levels
Support Resistance
1.1253 1.137
1.1204 1.144
1.1086 1.1557
Key Trading Level: 1.1322

EUR/USD – Trade Plan

The idea is to stay bearish below $1.1275 with a stop loss above $1.1305 and take profit at $1.1240. While buying is preferred above $1.1305 for quick take profit of around 50 pips.

Good luck!

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