The US ISM non-manufacturing PMI for February, due in an hour or so, is likely to dominate the wires as the employment index is known the influence the expectations surrounding the non-farm payrolls report and trigger broad based moves in the USD index.
Heading into the event, the EUR/USD pair is trading on a front foot. Having recovered from the low of 1.0853, the spot is currently treading waters around 1.0915 levels.
PMI to slow for a fourth consecutive month
The ISM non-manufacturing for PMI is seen slowing to 53.00; which will be the lowest reading since February 2014. However, the headline figure could take a backseat if the employment sub index indicates the jobs growth in the service sector accelerated in February.
The services employment index had dropped to 52.1 in January, matching the lowest since April 2014, from 56.3 the prior month.
Another slide in the employment index could trigger a wave of selling in the USD index, since it would increase the odds of a weaker-than-expected payrolls figure. This means, the EUR/USD pair could extend gains to key Fibo resistance at 1.0940.
On the other hand, a sharp rise in the employment could help USD recover losses that it suffered during in the early US session today.
EUR/USD Technical Levels
The immediate hurdle is seen at 1.0933 (100-DMA)-1.0940 (61.8% of Mar low-Aug high), ahead of the 50-DMA barrier at 1.0972, above which the spot could attempt a break above the rising trend line resistance at 1.10 handle. On the other hand, a break below 5-DMA at 1.0888 could see prices test support at 1.0845 (61.8% of 1.0517-1.1376), under which losses could be extended to 1.0777 (Jan 21 low).
(Market News Provided by FXstreet)