EUR/USD eyes indecisive monthly close
- EUR/USD is on track to close March with a Doji candle, which represents indecision in the market.
- Doji's high and low are focal points for the bull-bear tussle.
- Risk reset and dollar weakness looks likely with China's PMI bettering estimates.
EUR/USD has witnessed wild swings in both directions over the last four weeks and is on track to end March on an indecisive or flat note.
The currency pair rose to a high of 1.1495 on March 9, extending the late February rebound from 1.07778, as markets offered US dollars in response to the coronavirus outbreak in the US and the resulting risk aversion in the equity markets.
The situation worsened by mid-March as the relentless sell-off in the stock markets triggered a liquidity crisis and a global dash for the US dollar.
The EUR/USD pair fell from 1.1495 to 1.0636 in the 14 days to March 23 before regaining some poise to trade above 1.10. At press time, the spot is trading largely unchanged on the month at 1.1030.
The monthly candle has taken the shape of a Doji candle, a sign of indecision in the market place. From a long-term perspective, the high and low of the Doji candle at 1.1495 and 1.0636, respectively, are the levels to beat for the bulls and the bears.
As for Tuesday, the focus will be on the broader market sentiment, which could turn pro-risk, as the China data released in Asia showed the manufacturing activity rebounded sharply to above-50 levels or expansion territory.
A risk-on rally will likely weaken the haven demand for the US dollar and push EUR/USD higher. On the data front, the German Import Price Index for February and the Unemployment Rate is scheduled for release along with the preliminary Eurozone Consumer Price Index for March. Across the pond, the US Consumer Confidence and the Chicago Purchasing Managers' Index are due for release.
Technical levels