Positive US retail figures and weak economic confidence in the euro zone, led by Germany, are factors that contributed to the downward pressure on the performance of the EUR/USD currency pair. EUR/USD retreated to the support level 1.0855 after it attempted to rebound upwards towards 1.0904 before announcing the results of that data. Employment in the euro area increased by the largest amount since 2021 in the first quarter. This is despite the fact that the economy is undergoing moderate growth amid tightening monetary policy, while the currency bloc recorded its first trade surplus since September 2021, but due to a noticeable decrease in imports.
A flash estimate published by Eurostat on Tuesday showed that quarterly employment growth doubled to 0.6 percent in the first quarter from 0.3 percent in the previous period.
The rate marked the biggest rise since the third quarter of 2021. Employment growth is expected to remain unchanged at 0.3 percent. On an annual basis, employment registered a growth of 1.7 percent, following an increase of 1.5 percent in the previous quarter. Economists had expected growth to slow to 0.4%. The data confirmed that the 20-country currency bloc grew by only 0.1 percent after stabilizing in the fourth quarter. On an annual basis, GDP growth slowed to 1.3 percent from 1.8 percent in the fourth quarter. The rate was in line with estimates published on April 28.
In its Spring Economic Outlook, released on Monday, the European Commission said the region had weathered the energy crisis and the job market remained strong despite slowing economic growth. The European Union's executive arm raised its GDP growth forecast for the eurozone for this year to 1.1 percent from 0.9 percent and in 2024 to 1.6 percent from 1.5 percent.
Another official report from the Eurostat statistics agency showed that the trade balance turned positive for the first time since September 2021. The trade surplus totaled €17.0 billion, compared to a deficit of €0.2 billion in February. Exports fell by 0.1 percent in March compared to February. Meanwhile, imports recorded a monthly decline of 7.1 percent. Compared to March 2022, exports increased by 7.5 percent, while imports decreased by 10.0 percent in March. As a result, the trade balance turned positive with the surplus rising sharply to €25.6 billion. In the same period last year, the trade deficit amounted to 20.0 billion euros.
Euro predictions against the dollar today:
- The price of the EUR/USD currency pair is still in a downward correction path.
- The bears' control over the trend will strengthen if it moves towards the support levels 1.0830 and 1.0760, respectively.
- These levels are important to confirm the movement of technical indicators towards strong oversold levels.
- They can think of buying without taking any risks.
On the other hand, and for the same period of time, the strong bulls will not control the direction of the EUR/USD currency pair without returning to the vicinity of the psychological resistance 1.1000 again. The statements of US Federal Reserve policy officials this week will have a strong impact on the performance of the EUR/USD pair.
Ready to trade our Forex daily analysis and predictions? Here are the best regulated trading brokers to choose from.
