EURUSD: key support level found at 135th degree

On Wednesday, March 4, trading on the euro ended in decline. The pair corrected during the day after setting a new high as a result of the US Federal Reserve’s decision to reduce rates by 50 bp. The impetus for the selling of the euro was provided by the strengthening of the dollar off the back of the release of promising economic data.

The index of business activity in the service sector in the United States was above the forecast and hit a new high for the year. The ISM index in February rose to 57.3. Employment in the US private sector grew by 183,000, which was substantially more than the forecast of 170,000. The indicator for January was revised downwards by 82,000. Since the US Fed has already cut interest rates, employment data has become uninteresting to speculators.

Major US stock indexes rose from 3.7% to 4.5%, this was all as a result of the news concerning former Vice President Biden and his campaign to become the preferred presidential candidate for the Democratic Party in the United States.

Today’s events (GMT+3):

  • 16:30 USA: Nonfarm Productivity (Q4), Initial Jobless Claims (Feb 28), Unit Labor Costs (Q4).
  • 18:00 USA: Factory Orders (MoM) (Jan).
  • 20:00 UK: BoE's Governor Carney speech
  • 20:45 Canada: BoC's Governor Poloz speech
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Current situation:

Expectations regarding a weakening of the euro came true. The price fell below the balance line (Lb) and the level of 1.1120 (lower line of the channel). In Asian trading, the euro is under pressure against other currencies. Even though the stochastics show the price is in the “buy zone”, we are still daring to consider the continuation of correctional movement to the 135th degree - 1.1053. From here it will already be possible to look out for signals to buy the euro.

There are no European stats coming out today. The scheduled Carney and Poloz speeches are happening later on in the evening, the information they announce will be interesting to market players. Following the Fed, the Bank of Canada lowered its basic interest rate by 0.50% to 1.25%.

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