EUR/USD has declined below 1.08 following a strong US Services PMI reading. Preliminary March PMI data for Germany, France, and the Eurozone has yielded mixed results, while market participants await comments from US President Trump.
France’s Services PMI improved to 46.6, exceeding the expected 46.3. The Manufacturing sector rose to 48.9, surpassing both previous figures and estimates.
Germany’s Services PMI dropped to 50.2, missing the 51.4 forecast. Conversely, Manufacturing reached 48.3, beating the prior 46.5 and the anticipated 47.7.
Eurozone PMI Performance
The Eurozone Services PMI decreased to 50.4, below the expected 51.0, while Manufacturing increased to 48.7, exceeding forecasts. The US Services PMI surged to 54.3, surpassing the 51.2 consensus, whereas Manufacturing fell to 49.8.
The Chicago Fed National Activity Index for February was unexpectedly 0.18. Current projections indicate an 85.1% chance for the Federal Reserve to maintain interest rates in May. The US 10-year yield stands at around 4.32%.
On the weekly chart, EUR/USD remains trapped in a narrow range, with resistance at 1.0854 and support at 1.0782 and 1.0740. Both upside and downside levels will be key for future movements.
The euro’s dip below 1.08 followed a strong US Services PMI print, which far exceeded market expectations, reinforcing confidence in the American economy. European PMI figures, however, presented a mixed view. France saw improvements, particularly in the services sector, while Germany’s services activity slipped, though its manufacturing industry outperformed forecasts. The broader Eurozone displayed a similar pattern—manufacturing showed resilience, yet services softened.
What stands out in the US data is the sharp jump in the Services PMI to 54.3, well above both prior figures and predictions. Meanwhile, manufacturing in the States dipped below 50, slipping into contraction territory. At the same time, the Chicago Fed National Activity Index unexpectedly landed in positive territory, suggesting some momentum in overall economic activity. Coupled with an 85.1% probability that the Federal Reserve will hold rates steady in May, these data points suggest that the dollar still commands considerable support.
With US treasury yields hovering at 4.32%, capital remains drawn towards dollar-denominated assets, placing downward pressure on the shared currency. That pressure is becoming increasingly apparent in price action, with the pair stuck in a tight range. On the technical front, traders should keep a close eye on the 1.0854 resistance level, while 1.0782 and 1.0740 provide a safety net on the downside. A break in either direction will likely shape market sentiment in the near term.
Market Sentiment And Key Levels
As attention shifts towards upcoming macro events and central bank rhetoric, the coming sessions will likely test these ranges. Powell’s camp remains under scrutiny, with rate policy expectations heavily influencing forex flows. Meanwhile, European policymakers must contend with a fragmented economic recovery, where strength in manufacturing could be offset by weaker services output.
The next phase depends on how these factors unfold. With markets already pricing in a pause by the Fed, any deviation from this assumption could trigger adjustments. At the same time, any fresh concerns from European economic data could deepen the euro’s struggles. Those navigating the derivatives space should remain attuned to these developments, factoring in both the latest numbers and sentiment shifts around policy decisions.
