EUR/USD: Macron Gap Filled, New 34-Month Low Printed

EUR/USD: Macron Gap Filled, New 34-Month Low Printed

  • EU and German PMI data beat estimates, helping the EUR recover modestly
  • Macron gap, from 2017, now filled at $1.0779
  • Bears have full control over the price action despite this morning’s bounce

EUR/USD hit the lowest levels since April 2017 as the bears have finally managed to fill the Macron gap by printing levels below $1.0780. In the meantime, the price action got back above $1.08, but the rebound has been quite shallow which suggests that there is more room for losses.

Fundamental analysis: PMIs beat estimates

On the data front, the German Manufacturing PMI data came in better-than-expected. Moreover, the EU PMI readings beat expectations as well, which drove the EUR higher. Here are the numbers released this morning:

GER Markit Manufacturing PMI (Feb) Preliminary: 47.8 vs 44.8 expected

GER Markit Services PMI (Feb) Preliminary 53.3 vs 53.8 expected

GER Markit PMI Composite (Feb) Preliminary 51.1 vs 50.8 expected

EU Markit Services PMI (Feb) Preliminary 52.8 vs 52.2 expected

EU Markit Manufacturing PMI (Feb) Preliminary 49.1 vs 47.5 expected

EU Markit PMI Composite (Feb) Preliminary 51.6 vs 51 expected

The positive PMI readings helped EUR get back above $1.08 this morning.

“Looking ahead, today’s numbers might ease some minds concerning the virus, they do appear to show early signs of disruptions which may weigh on especially the manufacturing sector in the coming months,” analysts at Nordea said.

“A slower fall in new orders was a positive sign however, strengthening the case of a bottoming out in the industry.”

In the afternoon, we have PMI readings from the United States, in addition to speeches from some influential FOMC members.

The recent fall in the pair is mostly attributed to increased demand for US dollars rather than EUR weakness.

Technical analysis: Macron gap filled

After almost three years, the bears have managed to fill the so-called Macron gap from April 2017, when EUR jumped over the weekend following Emmanul Macron’s win over La Pen in presidential elections. Since then, EUR/USD traded higher and had no chance to come back and close the gap.

EUR/USD daily chart (TradingView)

The chart above shows the EUR/USD stopping at a crucial support for the bulls. The descending trend line (the red line), together with the horizontal support (the lower blue line) form a strong support around the $1.0780 handle.

Moreover, the first Fibonacci extension is also located in this area, as well as the aforementioned Macron gap. All in all, there are four different layers of support all sitting near $1.0780. A break of this level would be of substantial importance and could open the door for more losses.

On the upside, the EUR bulls must push the price action above $1.0880 to regain some of the control over the price action.


EUR/USD hit the lowest levels since 2017 on the increased demand for dollars. The upbeat German and EU PMI data helped the EUR this morning to slightly recover, but the bears are still in control.

By Michael Harris
I began trading in my early 20's at a local company and since then have combined my knowledge and love of content to become a news writer. I am passionate about bringing insightful articles to readers and hope to add some value to your portfolios!

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