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This week's upcoming reports will reflect the negative impact of the coronavirus pandemic. The US labor market data, published last week, was the beginning of a series of bad news. Key macroeconomic reports are set for release this week. If this data is weaker than preliminary estimates, the EUR/USD pair can react accordingly. Since both European and American reports will be published this week, the currency pair is likely to enter the price turbulence zone.
The macroeconomic calendar for March 30 is relatively empty. Germany's inflation data can attract investors' attention. The consumer price index in Germany is likely to demonstrate negative dynamics. The CPI is expected to fall by 0.2% month on month and drop by 1.3% year on year.
The EU inflation rate will be published on Tuesday, March 31. The general consumer price index in the eurozone has been gradually growing since October 2019 reaching its local high of 1.4% in January 2020 (the highest level since last April). In February, the general consumer price index lost ground shrinking to 1.2%. In March, the score is likely to fall to 0.8%. Core inflation should demonstrate similar dynamics. According to experts, the core index will be released in the red zone, at 1.1%. It is important to mention that if the core index is in line with the forecast level, the euro can remain flat as modest decline in inflation is expected.
Likewise, the US consumer confidence index is set for release on Tuesday. The indicator will be published by the Conference Board. Consumer confidence has demonstrated stable dynamics since last November. In February, the indicator reached 130.7, the level of six-month high. According to preliminary estimates, the index is expected to plunge to 115 reflecting the decline in consumption among American citizens. Taking into account the increase in the number of jobless claims, the indicator is likely to be worse than expected. As a result, the US dollar can be under pressure.
A series of reports is expected on Wednesday, April 1. These events will define the movement of the EUR/USD pair. The ADP jobs report will be published in the US. These figures will be important as part of the upcoming non farm payrolls data which is expected to be released on Friday. According to ADP experts, the employment is expected to drop by 125,000 in March. This data can put the dollar under pressure. On April 1, the ISM manufacturing PMI will be published. The index was lower than the line of 50, which defines expansion from contraction, during August-December period. However, in January and February, the indicator demonstrated positive dynamics. In March, the PMI is expected to plummet again. According to preliminary estimates, the index can decline to 46.
On Thursday, jobless claims data in the US can attract investors' attention. The indicator has stayed within the range of 200,000-280,000 for many years. Sometimes, it reached the level of 320,000. However, jobless claims skyrocketed to 3,283,000 last week. The indicator is expected to show the same dynamic this week. This data can trigger market jetters.
The most significant macroeconomic report is expected on April 3. The US non farm payrolls data has always caused increased volatility for the EUR/USD pair. However, this week's figures can be of particular importance.
According to preliminary forecasts, almost all components of non farm payrolls can be in the negative zone: the employment is expected to shrink by 10,000 in the non-agricultural sector, by 120,000 in the private sector, and by 10,000 in manufacturing. Both the rate of the economically active population and the average hourly wage are likely to decrease. For dollar sellers, it is important that the above mentioned components are not much lower than forecast levels. However, such a scenario is possible. According to some experts, due to the sharp increase in the number of unemployed, American agencies simply cannot cope with the influx of data, so the initial figures might not fully reflect the real situation. In other words, despite the pessimistic forecast, March non farm payrolls are likely to shock sellers of the EUR/USD pair.
Thus, volatility can take place in the coming trading days and the dollar can fall.
The EUR/USD pair has started this trading week with a corrective pullback, which is quite logical, given the dynamics of the past week. Bulls were able to pass the resistance level of 1.1060 (the middle line of the Bollinger Bands indicator, which coincides with the Kijun-sen line on the daily chart), but failed to break through and consolidate above the resistance level of 1.1150. Today, bears are pulling the price back to the mark of 1.1060. If bulls can hold the EUR/USD pair above this target by the end of Monday, it will be possible to open long positions at 1.1150. The next target of the upward movement is the level of 1,1200.
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