Eur/USD Big Picture: Weekly Review (25-29.03.2024)

EurUsd Big Picture - Quantum Strikes
EurUsd Big Picture - Quantum Strikes

The trading week of March 25-29, 2024, showcased a dynamic performance for the EUR/USD pair, marked by bullish beginnings, a mid-week peak, and a subsequent decline towards the week’s end. This review delves into the price action, highlighting key movements and closing figures to provide a comprehensive overview of the week’s market behavior.

Weekly Overview

The EUR/USD pair embarked on the week with a bullish sentiment, as evidenced by Monday’s opening at 1.0808 and a close at 1.0836, indicating a positive momentum that carried into Tuesday. The pair reached its zenith for the week on Tuesday, with a high of 1.08641, setting the stage for the week’s highest point.

However, post-Tuesday, the pair experienced a downward trajectory, culminating in a weekly low of 1.07678 on Friday. Despite the initial bullish trend, the latter part of the week saw the EUR/USD succumb to bearish pressures, leading to a notable decline.

Key Price Movements

  • Monday: The week commenced on a bullish note, with the pair closing higher than it opened.
  • Tuesday: Continued bullish momentum pushed the pair to the weekly high of 1.08641.
  • Wednesday to Friday: A shift in market sentiment led to a gradual decline, with Friday marking the weekly low at 1.07678.

Weekly Volatility

The Average True Range (ATR) for the week stood at 97 pips, indicating a moderate level of volatility. Thursday emerged as the most volatile day, with a daily ATR of 52 pips, underscoring the significant price movements that characterized the latter half of the week.

Weekly Economic Highlights

United States

  • New Home Sales (Feb): Contrary to expectations of a 3% increase, February saw a slight decline of 0.3%, with sales numbers slightly below forecasts at 0.662M. This indicates a cooling in the housing market, potentially impacting consumer confidence and spending.
  • Durable Goods Orders (Feb): Despite a significant anticipated drop in orders excluding defense, the sector showed resilience with a 2.2% increase. Overall durable goods orders also surpassed expectations, rising by 1.4%, suggesting underlying strength in manufacturing and investment.
  • Jobless Claims and GDP (Mar/23 & Q4): Initial jobless claims came in lower than anticipated at 210K, indicating robustness in the labor market. The GDP growth rate for Q4 was revised upwards to 3.4%, reflecting a stronger economic momentum than initially thought.
  • Michigan Consumer Sentiment (Mar): Surprisingly jumped to 79.4, showcasing an uptick in consumer optimism, which could translate into higher spending and economic activity.

Eurozone

  • GfK Consumer Confidence (Apr): Slightly improved to -27.4, hinting at a gradual recovery in consumer sentiment within the Eurozone.
  • Retail Sales (Feb): Year-on-Year sales showed a positive surprise with a 1.9% increase, while Month-on-Month sales rebounded by 0.5%, indicating resilience in consumer spending despite economic uncertainties.
  • Manufacturing PMI & Unemployment (Mar): The Manufacturing PMI slightly declined to 42.2, reflecting ongoing challenges in the sector. However, the unemployment rate remained stable at 5.9%, with a smaller-than-expected increase in unemployment changes, suggesting stability in the job market.

Key Takeaways

The week was marked by a mix of positive surprises and slight disappointments across both the United States and the Eurozone. The U.S. economy showed signs of robustness with better-than-expected durable goods orders, jobless claims, and GDP growth, alongside a significant boost in consumer sentiment. On the other hand, the Eurozone presented a mixed picture with slight improvements in consumer confidence and retail sales but challenges in the manufacturing sector.

The divergence in economic performance and sentiment between the two regions could influence the EUR/USD pair’s movements, with stronger U.S. data potentially supporting the dollar. However, the stability in the Eurozone’s unemployment rate and the rebound in retail sales may provide some support to the euro. As we move into the next week, traders will closely monitor these fundamental indicators to gauge potential currency movements and adjust their strategies accordingly.

The week concluded with the EUR/USD pair at 1.07899, encapsulating the week’s trading dynamics with a Doji candle on Friday. This closing pattern signifies the market’s indecision and potential anticipation of future directional moves.