03.04.201915:59 Forex Analysis & Reviews: EURUSD: the euro strengthened against the background of good data on PMI in the service sector and retail sales, but further growth is hardly possible

The data released in the first half of the day on activity in the services sector of the eurozone countries supported the European currency, which managed to strengthen its position against the US dollar, however, as the day before, the growth was temporary.

According to the report of the company Markit, the PMI Purchasing Managers Index for Italy rose to 53.1 points in March, while in February it was 50.4 points. Economists had expected the index to rise to 50.7 points in March. The IHS Markit noted that the positive dynamics of the activity of service companies can help pull the economy out of the recession.

The same indicator for Germany also pleased investors. According to the data, the PMI Purchasing Managers Index for Germany's service sector rose to 55.4 points in March, while in February it was 55.3 points. Economists did expect the index to decline to 54.9 points.

But France "pumped up" with its indicator for the service sector, which in March fell below 50 points, indicating its decline. According to the report, the PMI Purchasing Managers Index for France in March was 49.1 points, while in February it stood at 50.2 points. Economists did expect a larger fall of the indicator to the level of 48.7 points.

Good performance in the eurozone countries managed to lead to an increase in the overall index for the eurozone services sector, which rose to 53.3 points in March against 52.8 points in February. It was predicted to decrease to 52.7 points.

As for the composite index, based on recent data on eurozone PMI in the manufacturing sector and the service sector, in March there was a decline to 51.6 points against 51.9 points in February. Let me remind you that a value above 50 indicates an increase in activity.

All this once again suggests that the downside risks for the eurozone economy are only increasing.

Data on retail sales in the euro area also supported the euro, but some are not enough to positively affect the overall situation in the European economy.

According to the data, retail sales in the eurozone in February of this year grew by only 0.4% compared with January. Compared to the same period in 2018, retail sales increased by 2.8%. Economists had forecast retail sales to increase by only 0.2% in February. Retail sales in the eurozone in January were revised to 0.9% after falling 1.4% in December 2018.

As for the technical picture of the EURUSD pair, it generally remained unchanged. The buyers of risky assets, though close to the upper border of a wide side channel, but all that was able to push it a few points. Now the main trade will unfold in the range of 1.1185-1.1250 with a middle in the area of 1.1218. Only a break of 1.1250 will lead to new highs in the area of 1.1290 and 1.1330.