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EUR/USD Dips on Markit PMI

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EUR/USD Dips on Markit PMI

The EURUSD pair was lower Thursday, amid signs Eurozone business activity was unable to keep pace with US manufacturing growth in February.

Business activity in the 18-nation currency bloc dipped in February despite the sharpest rise in new orders since mid-2011. Markit Group’s gauge of Eurozone business output fell from 52.9 to 52.7, a sign recovery in the euro area continues to be fragile and uneven. French business activity contracted for the fourth consecutive month, a trend that threatens to pull the euro area’s second-largest economy back into recession.

Meanwhile, the US manufacturing industry posted stellar gains in February, as production levels rebounded from a weather-induced slowdown. Markit’s US manufacturing PMI increased from 53.7 to 56.7, the highest level in almost four years.

In other news, US consumer inflation increased 0.1 percent in January, matching estimates. This helped push annual inflation to 1.6 percent, closer to the Federal Reserve’s target of 2 percent.

The EURUSD traded within a moderate range of 1.3690-1.3762 before consolidating just north of 1.37. As of 16:30 GMT, the pair was trading at 1.3707, a loss of 27 pips. Technical support is found at 1.3702, followed by 1.3668 and 1.3633. On the upside, resistance is ascending at 1.3753, 1.3787 and 1.3822.

In other trading, the USDCAD pair strengthened for the second consecutive day, as the forex market continued to sell the Canadian dollar. The USDCAD increased 21 pips to 1.1095, where it sits as of 18:30 GMT.

The dollar strengthened against the British pound, which was mostly idle Thursday. The GBPUSD pair declined 23 pips to 1.6657.

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