- The US employment report for March is coming.
- Inflation in Europe rises to 7.5%, figure higher than expected.
- EUR/USD consolidates Thursday’s losses, pulls away from four-week high.
The EUR/USD is declining modestly on Friday and has been moving sideways for hours, ahead of important US economic data and then Eurozone inflation figures. The pair fell to 1.1040 in the European session, the lowest level since Tuesday.
The economic calendar shows as a key event the US employment report for March, to be published in less than two hours. The market consensus points to an increase in non-farm payrolls of 490,000 and the unemployment rate to go from 3.8% to 3.7%. Manufacturing data for March with the Markit PMI and the ISM will be released later on Friday. In addition, the evolution of spending on construction in February will be known.
In the Eurozone, the data showed a slowdown in activity in the manufacturing sector, with the preliminary PMI for March falling from 57 to 56.5. The other, more important report was inflation. In the Eurozone, the consumer price index reached a new record in March, climbing to 7.5%, pushed by the invasion of Ukraine. The upward surprise was expected after the known data from countries in the region in the previous days.
On Thursday the euro was affected by the inflation figures and is still weak, extending the decline also against the Swiss franc and the pound. EUR/USD went from weekly highs at 1.1185, to retreat more than a hundred pips.
In the preview of the employment data, the EUR/USD is moving sideways around 1.1050, still with some weakness, although also showing signs of stabilization after finding support above 1.1040. At 1.1030 and 1.1000, there are the next supports in case of a bearish extension. To the upside, resistance can be seen at 1.1075/80 and then at 1.1100 and 1.1130.
Technical levels
Source: Fx Street
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