The EUR/USD pair experienced notable volatility on Tuesday, following our previous forecast indicating a potential bearish continuation. Despite initially touching previous support-turned-resistance levels, the pair managed to close in positive territory. Currently, it remains within our Fibonacci levels of interest, signaling a possible continuation of the bearish trend. Our strategy for EUR/USD swing trading revolves around anticipating another bearish impulse.
The USD exhibited weakness during the American trading session on Tuesday, providing support for the rebound in EUR/USD. Despite a negative shift in risk sentiment, investors refrained from placing bets on an extended USD rally.
Market participants are now closely watching the release of the ADP Employment Change data from the US. Forecasts suggest an increase of 148K jobs in March. Any print at or below 100K could trigger a selloff in the USD, prompting an immediate reaction.
Additionally, the ISM Services PMI data is set to be featured in the US economic docket. Earlier in the week, the USD showed strength following better-than-expected ISM Manufacturing PMI data, particularly the sharp rise in the Prices Paid Index. A similar reaction may occur if the ISM Services PMI beats analysts' estimates.
In light of these developments, our outlook for EUR/USD leans towards a bearish continuation of the trend.
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