Eurusd rises as US economic indicators show positive trends, while Euro area faces mixed signals

EURUSD Analysis

Performance after Thursday
Period	Pct	Chg	Momentum
Thursday	0.1%	10.5 Pips
Week to-date	4.09%	424.3 Pips
March	4.09%	424.3 Pips

Upcoming key events (London Time)

Fri 09:30 AM EUR European Central Bank’s President Christine Lagarde speech
Fri 10:00 AM EUR GDP (seasonally adjusted) (3-mth)
Fri 01:30 PM USD Nonfarm Payroll Employment
Fri 01:30 PM USD Average Hourly Earnings (12-mth)
Fri 05:30 PM USD Federal Reserve Chair Jerome Powell speech

What happened lately

In the United States, several economic indicators have demonstrated positive trends recently. Nonfarm Business Labor Productivity climbed to 1.5% in the fourth quarter, improving from 1.2% in the prior quarter, signaling better efficiency in output. Additionally, Unit Labor Costs saw a decrease to 2.2% in Q4, down from 3% in Q3, suggesting a moderation in labor cost pressures. Furthermore, the labor market appears strong as Initial Unemployment Insurance Claims fell significantly to 221K for the week ending 01 March from 242K previously. U.S. new orders for manufactured goods also showed resilience, rising by 1.7% in January after a decline of -0.6% in December.

Meanwhile, in the Euro Area, the European Central Bank (ECB) has opted to drop its main refinancing operations rate to 2.65% from 2.9%. Despite this easing, there are signs of slowing consumer demand as January’s Retail Trade Turnover dropped to -0.3% from -0.2% in December, with the overall 12-month turnover declining to 1.5% from 1.9%. Contrarily, the Producer Price Index (PPI) showed upward momentum as the 12-month rate increased to 1.8% in January, and the monthly rate rose to 0.8% from 0.5% in December.

The reported economic data could influence the EURUSD currency pair. The strengthening indicators in the U.S., including productivity gains and a decline in labor costs alongside manufacturing growth, are supportive of a stronger dollar. Meanwhile, in the Euro Area, the ECB’s interest rate cut and mixed trade and price data suggest a less robust economic performance, which may weigh on the euro. As a result, if U.S. data continue to outperform, EURUSD could face downward pressure, particularly if the European Central Bank appears more dovish. Market participants will be closely watching upcoming events, such as speeches from the Federal Reserve and ECB leaders, as well as relevant economic data releases to glean further insights into potential monetary policies that might impact currency movements.

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What can we expect from EURUSD today?

EURUSD on Thursday rose 0.1% to 1.07980. Price is above 9-Day EMA while Stochastic is rising in overbought zone.

Updated daily direction for EURUSD looks bullish as the pair ended higher after Thursday trading session.

Looking ahead for the day, immediate upside resistance level is R1 at 1.08055 with break above could target R2 at 1.0813 or figure level area. While towards the downside, we are looking at daily low of 1.07853 as an important support. Break below this level could weaken the current bullish momentum. A break above 1.08029 may suggest continuation after recent positive movement.

For the week to-date, take note that EURUSD is bullish as the pair continued to trade higher and is up by 4.09% over the past few days.

Key levels to watch out:

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