EUR/USD showed a minor sell-off after upbeat US ISM services PMI. It hit an intraday high of 1.07756 and currently trading around 1.07531.
Recent U.S. services sector data are conflicting. The ISM Services PMI in February 2025 reports a robust expansion at 53.5, whereas the S&P Global Services PMI reports a contraction at 49.7. The Final Services PMI reading splits the difference with a reading of 51.0, indicating a marginal overall expansion.
ECB Policy Outlook
The ECB is likely to cut its key interest rates by a further 25 basis points. This will push the deposit facility rate to 2.50%, the main refinancing rate to 2.65%, and the marginal lending facility to 3.00%
Technical Analysis of EUR/USD
The pair is holding above the short and below the long-term moving average in the 4-hour chart. Near-term resistance is seen at 1.0780; a break above this may push the pair to targets of 1.0820/1.0850. Major bullish momentum is likely only if prices are able to break above 1.0870, where levels of 1.0935/1.100. On the downside, support is seen at 1.0660 any violation below will drag the pair to 1.0600/1.0500/ 1.0460.
Market Indicators and Trading Strategy
Commodity Channel Index (CCI)- Bullish
Average Directional Movement Index (ADX) - Bullish. It is good to buy on dips around 1.0718-20 with a stop-loss at 1.0660 for a target price of 1.0935.
