Forex - EUR/USD off session lows, remains vulnerable

Shutterstock photo - The euro pulled back from session lows against the dollar on Thursday but the single currency remained vulnerable amid concerns over the deteriorating economic outlook for the euro zone and uncertainty over a bailout deal for Cyprus.

EUR/USD pulled back from 1.2880, the session low, to hit 1.2923 during European afternoon trade, still down 0.09% for the day.

The pair was likely to find support at 1.2842, Tuesday's low and a four-month low and resistance at 1.2954, the session high.

The euro weakened broadly earlier after data showed that the euro zone manufacturing purchasing managers' index slumped to a three month low of 46.6 in March from 47.9 in February, compared to expectations for a reading of 48.2.

The euro zone services PMI fell to a five-month low of 46.5 from 47.9 in March.

Germany's manufacturing PMI fell to 48.9 in March from 50.3 the previous month and the country's services sector expanded at the slowest rate in four months.

The French manufacturing PMI came in at 43.9 in March, unchanged from February's reading, while service sector activity in France fell to a 49-month low of 41.9.

Elsewhere, the European Central Bank announced that it will continue to supply emergency funding to Cyprus's banks until next Monday.

The ECB said that further funding would be considered if an agreement with the European Union and the International Monetary Fund on a bailout is in place.

The euro remained supported after the Federal Reserve said Wednesday that it will leave monetary policy unchanged despite recent signs that the U.S. recovery is gaining traction.

Market sentiment was also buoyed by data showing that China's HSBC manufacturing PMI rose to 51.7 in March from 50.4 in February, indicating that the recovery in the world's second largest economy is still on track.

The euro was lower against the pound and the yen, with EUR/GBP down 0.59% to 0.8515 and EUR/JPY dropping 0.88% to 123.10.

In the U.S., the Department of Labor said the number of people who filed for unemployment assistance last week rose by 2,000 to a seasonally adjusted 336,000, compared to expectations for an increase of 8,000 to 342,000.

The U.S. was to release data on existing home sales and manufacturing activity in Philadelphia later in the trading day. - offers an extensive set of professional tools for the Forex, Commodities, Futures and the Stock Market including real-time data streaming, a comprehensive economic calendar, as well as financial news and technical & fundamental analysis by in-house experts.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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