The economy of Europe may recover once again.

The Euro has weakened slightly due to expectations from investors and analysts that the ECB may soon cut interest rates. This would reduce borrowing costs and lead to increased profits in various currency pairs.

Several policymakers at the ECB have expressed increasingly positive views on the need for interest rate cuts. Villeroy de Galhau, one of the ECB policymakers, stated that it is almost time for Europe to sustain growth and it is necessary to lower interest rates to reduce various costs. Additionally, there is growing confidence within the ECB regarding the return of inflation to the target of 2% by 2025, especially with moderate wage growth, which would strengthen the economy in case of interest rate cuts.

The Purchasing Managers' Index (PMI) for the manufacturing sector in the Eurozone has decreased for the third consecutive month, reaching 45.7 in March, lower than the market's expectation of 47. This indicates a continuous slowdown in manufacturing activity, with rapid declines in employment, production capacity, and new orders leading to further reduction in inventory levels, particularly in the largest economies like Germany and France.

On the other hand, the PMI for the services sector increased to 51.1 in March, marking the second consecutive month of expansion in service activities. Despite intense competition in the service sector, continuous emergence of new businesses has led to increased employment. However, the rate of job creation has slowed down. In terms of costs, only a slight decrease in raw material prices has been observed.

Labor costs per hour in the Eurozone increased by 3.4% year-on-year in the fourth quarter of 2023, following a 5.2% increase. Wage and salary costs per hour worked increased by 3.1% when compared across industries, with the highest increase observed in the construction sector at 4.4%, followed by the service sector at 4.1%.

Consumer confidence index increased by 0.6 points from the previous month, as consumers have started to have a more positive outlook on the current financial situation and slightly pessimistic views on their own country's economic situation. However, the majority of consumers' spending ability remains relatively stable, contributing to further increase in consumer confidence trends.

Techical analysis data (5H)

Resistance: 0.9283, 0.9294, 0.9301

Source: Investing.com

Buy/Long 1: If the price touches support in the price range of 0.9258 - 0.9265 but cannot break the support at 0.9265, you may set a TP at approximately 0.9294 and SL at around 0.9247 or according to your acceptable risk.

Buy/Long 2: If the price breaks the resistance in the price range of 0.9283 - 0.9294, you may set a TP at approximately 0.9301 and SL at around 0.9258 or according to your acceptable risk.

Sell/Short 1: If the price touches resistance in the price range of 0.9283 - 0.9294 but cannot break the resistance at 0.9283, you may set a TP at approximately 0.9258 and SL at around 0.9301 or according to your acceptable risk.

Sell/Short 2: If the price breaks the support in the price range of 0.9258 - 0.9265, you may set a TP at approximately 0.9247 and SL at around 0.9294 or according to your acceptable risk.

Pivot point March 29, 2024 10:35 PM. GMT+7