Eur usd sees slight dip as U.S. durable goods decline and German business sentiment improves

EURUSD Analysis

Performance after Wednesday
Period	Pct	Chg	Momentum
Wednesday	-0.01%	-0.8 Pips
Week to-date	-0.2%	-22.1 Pips
March	4%	415.3 Pips

Upcoming key events (London Time)

Thu 12:30 PM USD GDP annual rate
Thu 06:05 PM EUR European Central Bank’s President Christine Lagarde speech
Fri 12:30 PM USD PCE Price Index, excluding food and energy (12-mth)

What happened lately

In the United States, February witnessed a downturn in durable goods orders, which decreased by 0.9% after a 3.2% increase in January. Nondefense Capital Goods Orders excluding Aircraft also fell by 0.3%, a significant drop from January’s 0.9%. Furthermore, Durable Goods Orders excluding Defense fell to 0.8% from 3.7% in the previous month. However, there was a positive note in Durable Goods Orders excluding Transportation, with a rise of 0.7% compared to a stagnant figure in January. The housing market showed signs of recovery as well, with new-home sales increasing by 1.8% following a steep decline in January. Nonetheless, the U.S. House Price Index decreased slightly in January to 0.2% from December’s 0.5%.

In contrast, Germany displayed a marked improvement in business sentiment as reflected in the ifo expectations and business climate indices for March. The ifo Expectations index rose to 87.7 points from 85.4 points in February. Similarly, the ifo Business Climate Index increased from 85.2 points in February to 86.7 points in March. The Current Assessment component of the ifo indices mirrored this positive trend, climbing from 85 points in February to 85.7 points in March. These figures indicate a generally positive outlook for the German economy.

The recent developments in the U.S. and German economy could influence the EURUSD dynamics. The contraction in U.S. durable goods orders suggests potential weakening in the U.S. economy, which may exert downward pressure on the USD. On the other hand, positive economic indicators from Germany signal strength in the Eurozone, which could bolster the EUR. The EURUSD pair’s marginal drop of 0.01% to 1.07900 could be indicative of shared sentiments within these macroeconomic updates. Going forward, significant events such as the U.S. GDP data release and the speech of European Central Bank’s President Lagarde are anticipated to play a crucial role in determining the short-term trajectory of the EURUSD currency pair. Any dovish statement from ECB or a stronger-than-expected U.S. GDP report could counterbalance the current outlook, making it imperative for market participants to remain vigilant of these upcoming events.

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What can we expect from EURUSD today?

EURUSD on Wednesday dropped -0.01% to 1.07900. Price is below 9-Day EMA while Stochastic is falling in oversold zone.

Updated daily direction for EURUSD looks mixed as the pair is likely to consolidate above 1.07853 (S1).

Looking ahead today, to see upside interest, we prefer to look at price breakout of last daily high of 1.07940 or trades above daily pivot 1.07897. Break above could target R1 at 1.07943. While to the downside, we are looking at 1.07853 (S1) and daily low of 1.07850 as support levels. EURUSD need to break on either side to indicate a short-term bias. A close below 1.07850 would indicate selling pressure.

For the week to-date, take note that EURUSD is bearish as the pair posted lower by -0.2%.

Key levels to watch out:

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