Week Ahead: EURUSD stalemate signals major breakout
- EURUSD ↓ 0.5% MTD
- EU CPI + US NFP combo = fresh volatility?
- EU Flash CPI forecast to trigger moves of ↑ 0.3% & ↓ 0.2%
- US Feb NFP forecast to trigger moves of ↑ 0.5% & ↓ 0.6%
- Bloomberg FX model – 79.6% EURUSD – (1.1701 – 1.1929)
The world’s most-traded FX pair has been trapped within a range since mid-February!
But this could change thanks to a week packed with heavy-hitting data.
At the time of writing, EURUSD is practically flat month-to-date with key support at 1.1740 and resistance at 1.1830.
Why is the EURUSD ranging?
- The euro is flat against the US dollar this month, lagging behind its G10 peers’ performance versus the USD.
- Technical forces may also be at play with prices bouncing with a 90-pip range.
Nevertheless, with Trump’s tariff fiasco and key data could spell fresh opportunities for the EURUSD in the week ahead:
Monday, 2nd March
- JPY: BoJ Himino Speech, Japan Unemployment Rate (Jan)
- CNY: China RatingDog Manufacturing PMI (Feb)
- EUR: Germany Retail Sales (Jan)
- CAD: Canada S&P Global Manufacturing PMI (Feb)
- USD: US ISM Manufacturing PMI (Feb)
Tuesday, 3rd March
- EUR: Eurozone Inflation Rate (Feb)
- JPY: Japan unemployment, capital spending, monetary base
- SPN35: Spain unemployment
- GBP: UK Chancellor Rachel Reeves – Spring Statement
Wednesday, 4th March
- AUD: Australia GDP Growth Rate (Q4)
- CNY: China NBS Manufacturing PMI, Chinese People’s Political Consultative Conference
- JPY: Japan Consumer Confidence (Feb)
- EUR: Eurozone Unemployment Rate (Jan)
- USD: US ISM Services PMI (Feb), ADP Employment Change (Feb), US Beige Book
Thursday, 5th March
- AUD: Australia Balance of Trade (Jan)
- EUR: Eurozone Retail Sales (Jan)
- CHF: Swiss Unemployment Rate (Feb)
- TWN: Taiwan industrial production
- USD: US Initial Jobless Claims
Friday, 6th March
- EUR: Eurozone GDP
- TWN: Taiwan CPI
- USD: US NFP (Feb), Retail Sales (Jan), Unemployment Rate (Feb)
Here are 4 key themes that could rock EURUSD:
1) Renewed US-EU trade tensions
Trump’s new global 10% tariffs have taken effect after the Supreme Court ruled that his previous tariffs were illegal.
Foreign leaders are now on standby with the EU reportedly delaying the ratification process of the EU-US trade agreement. This development could lead to renewed US-EU trade tensions, especially after Trump warned nations not to ‘play games’ on existing agreements. If the uncertainty deepens, a bout of euro weakness could be on the cards as investors fret over European economic outlook.
2) EU data dump + crucial CPI
A string of high impact data releases from Europe including the key CPI may provide critical insight into the economic outlook. On Tuesday 3rd March, the February inflation figures will be published with markets forecasting CPI to rise 1.6% YoY compared to 1.7% in the previous month.
While signs of cooling inflationary pressures may slowly build the case for lower rates, traders are only pricing in a 35% chance of an ECB cut in 2026.
3) US data galore + key NFP
It’s a big week for the United States due to a volley of economic reports including February’s NFP report.
Over the past few weeks, expectations around lower US rates have slowly dwindled thanks to better-than-expected US data. The US economy is expected to have created 60,000 jobs in February compared to 130,000 in the previous month while the unemployment rate unchanged at 4.3%.
Ultimately, another upside surprise could further shave Fed cut bets – boosting the dollar as a result.
Traders are currently pricing in a near 60% chance that the Fed will cut rates by June 2026.
4) Technical forces
The EURUSD is on breakout watch with prices trading above the 50, 100 and 200-day SMA.
- A solid daily close above 1.1830 may signal a move toward 1.1902 - the upper limit of the Bloomberg FX model.
- Should 1.1830 prove to be a tough resistance, this could trigger a decline back toward 1.1740 and 1.1701 – the lower limit of the Bloomberg FX model.
