The pair will likely keep falling as bears target the next key support at 1.080.
Sell the EUR/USD and set a take-profit at 1.050.Add a stop-loss at 1.1070.Timeline: 1-2 days.
Set a buy-stop at 1.1035 and a take-profit at 1.1100.Add a stop-loss at 1.0920.
The EUR/USD pair remained under pressure as investors assessed the statement by the Federal Reserve and ahead of the upcoming flash manufacturing and services PMI. It is trading at 1.100, which is slightly lower than this week’s high of 1.1070.
US and European PMI Data
The crisis in Ukraine has been the biggest story in the financial market in the past few weeks. The crisis has led to a significant increase in the cost of doing business. Therefore, the flash manufacturing and services PMI numbers that will be published today will provide more information about the economy.
In France, analysts expect that the manufacturing PMI declined from 57.2 to 55.0. Similarly, they expect that the services PMI declined from 55.5 to 55.0. Still, a PMI figure of 50 and above is usually a sign that an economy is doing well.
In the Eurozone, analysts expect that the bloc’s manufacturing PMI declined from 58.2 to 56.0. Similarly, they expect that the services and composite PMIs declined to 54.2 and 53.9, respectively.
The same trend is expected to have happened in the United States. The manufacturing, services, and composite PMIs are expected to drop to 56.3, 56, and 55.0, respectively.
The other key catalyst for the EUR/USD will be the latest American durable goods orders for February. Economists expect the data to show that the headline durable goods orders declined to 0.1% while core orders declined from 0.7% to 0.6%. Durable goods orders are important signals of the performance of the economy.
Meanwhile, in a statement on Wednesday, Fed’s Jerome Powell reiterated that the Fed will embrace a more hawkish stance in a bid to slow inflation. Analysts now expect six more rate hikes this year.
The four-hour chart shows that the EUR/USD pair formed a double-top pattern around the 1.1121 range. In price action analysis, this pattern is usually a bearish sign. The pair also managed to move below the ascending trendline that is shown in black. It has also moved slightly above the 23.6% Fibonacci retracement level. The moving average convergence and divergence (MACD) moved below the neutral level.
Therefore, the pair will likely keep falling as bears target the next key support at 1.080. However, a move above the key resistance at 1.1080 will invalidate this view.