The EUR/USD is trading at $1.3768, down 0.18% as the surprise drop in German services and manufacturing dragged overall eurozone figures lower. While Brussels revealed eurozone manufacturing and services purchasing managers index (PMI) both declined and were worse-than-expected in March, the respective figures from Germany dragged the eurozone average even lower. It wasn’t all bad news, however, as France reported a manufacturing and services PMI of 51.9 and 51.4; both announcements were much higher than anticipated.
While the EUR/USD initially jumped when the French reports were released – as, even though France is the second largest economy in the eurozone, its economic indicators have been sliding into the red lately – the other figures quickly dragged the euro into the red versus the dollar. This has added to the euro still being unable to pull back its losses following the Federal Reserve’s comments last week, as well the grey cloud of Crimea still hanging over Europe.
The currency pairing has been in an uptrend since the start of February, but it failed to break the $1.4 level. It is finding support at the 50-day moving average of $1.3727. If the US manufacturing PMI report at 1.45pm (London time) is better-than-expected, we could see the euro head towards the 200-DMA of $1.3575.