The EUR/USD pair is trading below the 1.0500 mark in the European session on Friday, reflecting a cautious market sentiment. This development follows moderate expansion in economic activities in Germany and the broader Eurozone's private sector in February. Despite the euro's attempt to break above the 50-moving average on the daily chart, mixed Purchasing Managers' Index (PMI) reports have capped its upside potential.
The market is closely monitoring the upcoming release of the US Flash Manufacturing PMI, scheduled for 15:45 CET on Friday. Investors are keenly awaiting this report as it may offer insights into the Federal Reserve's future monetary policy moves. Speculation arises that the Fed might cut rates more than previously anticipated, echoing recent actions by the UK.
The euro has struggled to gain traction due to these mixed signals, leaving the EUR/USD on the back foot. Meanwhile, the upbeat UK Retail Sales data has boosted demand for the Pound Sterling, further complicating the euro's path. The weakness of the Greenback persists, yet equity markets remain calm, with both the S&P and Nasdaq indices nearing new highs.
Analysts note that the USD 33.00 zone stands as a significant resistance level for the EUR/USD. A decisive break above this threshold could potentially trigger fresh upside momentum for the euro. Currently, the EUR/USD hovers near the 50-moving average on the daily chart, indicating uncertainty among investors.