On Friday, the EUR / USD pair is showing an upward trend, but the fundamental background in the market remains uncertain.
The current growth of the currency pair is due to the processing of the data on the US labor market published yesterday. Unexpectedly, the number of new applications for unemployment benefits rose from 848 thousand to 861 thousand. Investor optimism regarding the rapid recovery of the US economy after the crisis has significantly decreased. The dollar was under pressure.
Later today in Europe and the US, preliminary data on manufacturing and services PMI for February will be published, which may radically change the situation in the foreign exchange market. PMI is expected to decline in Europe. This can limit the local growth of the currency pair. Traditionally, the main focus of investors will be on the PMI data for Germany.
In the US, PMI is also expected to decline from previous data, but investors will also be watching the report on existing home sales. Experts predict a decrease in the indicator from 6.76 million to 6.61 million.
In general, the currency pair retains good opportunities for the further development of the upward movement, but the PMI data may locally reverse the price downward and further growth will occur only after the formation of a pullback movement.
The bearish signals still prevail on the chart. Within the day, we expect a correction to 1.2080 and a resumption of downward movement. Break of support at 1.2025 will open the way to 1.1960.
The main scenario is a rollback to 1.2065 and growth in the direction of 1.2120.
Alternative scenario - growth to 1.2120 from current levels.
The current fundamental outlook is neutral. We consider longs on a price rollback to 1.2065.
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