EUR/USD Rebounded On Friday After US ISM PMI Miss Sparked Risk-On Investor Appetite

By Joshua Gibson of FX Street

Saturday, March 2, 2024 5:15 PM EST

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The EUR/USD currency pair vaulted back into the 1.0840 area following a market pivot.
Market risk sentiment saw a late-week recovery on Friday.
US Manufacturing PMI unexpectedly declined, sparking rate cut hopes.

The EUR/USD currency pair caught a bounce from the 1.0800 level after markets pivoted into a risk-on stance following Friday’s decline in US ISM Manufacturing Purchasing Managers Index (PMI) numbers, seemingly flubbing forecasts and stepping deeper into contraction territory. Slipping economic figures sparked renewed hopes of Federal Reserve rate cuts.

Meanwhile, the Fed’s latest Monetary Policy Report showed the central bank firmed up faith in inflation reaching the 2% target. The European Harmonized Index of Consumer Prices (HICP) inflation fell less than expected in February, helping to provide some sentiment support for the euro on Friday.

Market Movers: EUR/USD Attempted to Re-Enter Upper Bound of the Range on US PMI Miss

Pan-European Core HICP inflation came in above expectations for the year ended February, printing at 3.1% year-over-year versus the forecasted decline to 2.9% from 3.3%.
Headline year-over-year HICP inflation slipped to 2.6% versus the forecast 2.5%, with the previous reading at 2.8%.
February’s US ISM Manufacturing PMI slipped to 47.8 versus the forecasted increase to 49.5 from the previous 49.1.
The University of Michigan’s Consumer Sentiment survey index for February also slipped to 76.9, down from the steady forecast of 79.6.
ISM Manufacturing Prices Paid for February also declined to 52.5, versus the forecasted uptick to 53.0 from the previous 52.9.
Next week will see another US Nonfarm Payrolls (NFP) release on Friday, with the ADP Employment Change preview slated for Wednesday.
The European Central Bank’s (ECB) latest rate call is also coming next week, which is slated for Thursday.

The Euro Price on Friday

The table below shows the percentage change of the euro against other major currencies on Friday.

Technical Analysis: EUR/USD Remained Range-Bound, Found Bullish Pickup on Friday

The EUR/USD currency pair recovered from familiar near-term lows at the 1.0800 handle before rising into the 1.0840 area, as it appeared set to wrap up the trading week close to where it started. Little directional momentum kept the pair in a sideways range for the entire trading week, marked in between the 1.0860 and 1.0800 levels.

The EUR/USD duo remained mired in the 200-day Simple Moving Average (SMA) at the 1.0830 mark. The pair remained up around 1.3% from the last swing low into the 1.0695 figure in early February.