EUR/USD Tests 1.1565 as Markets Await New Economic Catalysts

On Wednesday, markets will focus on March manufacturing activity data from S&P Global and Hamburg Commercial Bank (HCOB). Germany’s index is expected to come in around 51.7 points, although some analysts anticipate a renewed decline as markets react to the escalation of the Middle East conflict, during which energy prices have shown their fastest upward trend in recent years. Previously, EU foreign policy chief Kaja Kallas stated that the European Union is not critically dependent on oil supplies from Persian Gulf countries, while acknowledging that rising oil prices would negatively affect the bloc’s economy. Across the eurozone, the manufacturing PMI is expected at 51.4 points. Another notable release at 12:00 (GMT+2) will be the unemployment rate, which is expected to remain unchanged at 6.1%.

US investors will focus on the ADP employment report at 15:15 (GMT+2), based on a survey of approximately 400,000 businesses. March forecasts suggest a slowdown from 63,000 to 40,000 jobs, which may have limited impact on the market. More significant could be February retail sales data, with consensus forecasts pointing to a 0.5% monthly increase following a 0.2% decline in January. Meanwhile, March business activity indices due at 17:00 (GMT+2) are expected to remain positive, with the ISM index rising slightly from 52.4 to 52.5 points and the S&P Global indicator remaining around 52.4 points. Earlier, the JOLTS report showed a sharp decline in job openings from 7.24 million to 6.882 million, below expectations of 6.92 million.

Meanwhile, European Energy Commissioner Dan Jørgensen warned governments about prolonged volatility in energy markets even after the acute phase of the Middle East crisis ends. Since late February, European gas benchmarks have surged more than 70.0%, while diesel and jet fuel prices have risen by 50.0–60.0%, increasing import-driven inflation and negatively affecting the region’s trade balance by adding approximately €12.0–15.0 billion in fuel costs. Although direct oil and gas supplies remain diversified and not critically dependent on the Strait of Hormuz, short-term risks are concentrated in refined petroleum products, where supply disruptions have already pushed crack spreads up by 15.0–20.0%.

European investors also assessed preliminary inflation data released earlier. Annual consumer inflation in the eurozone rose from 1.9% to 2.5%, slightly below expectations of 2.6%, while monthly inflation increased from 0.6% to 1.2%. Core inflation declined from 2.4% to 2.3% and stabilized near 0.8%. The key driver was the energy component: in Germany, energy prices rose by 7.2% year-over-year in March, moving back into positive territory for the first time since December 2023 and pushing overall inflation to 2.8%, the highest annual level. Meanwhile, core inflation eased to 2.3% from 2.4%, indicating that rising energy costs have not yet fully passed through to other goods and services. European authorities are therefore recommending postponing scheduled refinery maintenance, minimizing pro-cyclical measures, and coordinating within the bloc to prevent supply shortages.

Support and resistance levels

On the daily chart, Bollinger Bands show moderate growth as the price range narrows, reflecting mixed short-term trading conditions. MACD is turning upward, forming a new buy signal and attempting to move above the signal line. Stochastic has rebounded from the “20” level and is turning higher, supporting the development of corrective growth in the near term.

Resistance levels: 1.1577, 1.1600, 1.1621, 1.1655.

Support levels: 1.1529, 1.1500, 1.1450, 1.1400.

Trading scenarios and EUR/USD forecast

Long positions may be opened after a confident breakout above 1.1577 with a target at 1.1655. Stop-loss — 1.1529. Implementation period: 2–3 days.

A rebound from 1.1577 as resistance followed by a breakout below 1.1529 may signal short positions with a target at 1.1450. Stop-loss — 1.1577.