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EUR/USD Corrects Lower While Oil Price Extends Rally

Aayush Jindal

Aayush Jindal

Key Highlights

  • EUR/USD started a downside correction from the 1.0920 zone.
  • It broke a key bullish trend line with support near 1.0850 on the 4-hours chart.
  • GBP/USD is also correcting lower below the 1.2300 level.
  • The US ISM Manufacturing PMI could decline from 47.7 to 47.5 in March 2023.

 

EUR/USD Technical Analysis

The Euro gained pace above the 1.0850 resistance zone against the US Dollar. EUR/USD even climbed above 1.0900 before the bears appeared.

Looking at the 4-hours chart, the pair tested the 1.0920 zone. A high was formed near 1.0922 before the pair started a downside correction. There was a move below the 1.0900 level. Besides, the pair traded below a key bullish trend line with support near 1.0850.

The pair traded below the 50% Fib retracement level of the upward move from the 1.0709 swing low to 1.0923 high. On the downside, an immediate support is near the 1.0780.

The next major support is near the 1.0750 level and the 100 simple moving average (red, 4-hours), below which there is a risk of a move towards the 1.0680 support.

On the upside, the first major resistance is near the 1.0865 level. The next key resistance is near the 1.0900 zone. A clear move above the 1.0900 resistance might send the pair towards the 1.0960 zone. Any more gains might send the pair towards 1.1000.

Looking at oil price, there were more gains above the $80 level and the bulls seem to aim another push towards $85 in the near term.

Economic Releases

  • Germany’s Manufacturing PMI for March 2023 - Forecast 44.4, versus 44.4 previous.
  • Euro Zone Manufacturing PMI for March 2023 – Forecast 47.1, versus 47.1 previous.
  • UK Manufacturing PMI for March 2023 – Forecast 48, versus 48 previous.
  • US Manufacturing PMI for March 2023 – Forecast 49.3, versus 49.3 previous.
  • US ISM Manufacturing PMI for March 2023 – Forecast 47.5, versus 47.7 previous.