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Forex: EUR/USD still facing resistance at 1.2825 ahead of US ISM PMI

FXstreet.com (Barcelona) - Some volatility was seen prior to the release of the March manufacturing PMI by Markit, with a first test of support at 1.2800 before a rise to 1.2825 resistance. Data rose from 54.3 to 54.6, disappointing investors looking for a figure at 54.9. The EUR/USD eased from its highs towards 1.2815, for now, ahead of US ISM manufacturing PMI and construction spending.

The ISM manufacturing PMI is expected to come in at 54.1. “This will mark the fourth consecutive month in expansionary territory for this indicator, as the sustained push higher has been reflected in the improving tone in the various regional manufacturing sector indicators, which are now all in expansionary territory”, wrote TD Securities analyst Alvin Pontoh, pointing to the steady improvement in the new orders to inventory spread (a proxy for future production activity) which is now at its highest level since May, as key to upside potential for production activity. “New orders activity should advance during the month, with the employment sub-index also edging higher. Nevertheless, as the pace of growth slows in the coming months, we expect manufacturing sector activity to moderate”, Pontoh concluded.

“The EUR/USD currency pair is being corrected towards its previous descending structure. We think today the price may reach the level of 1.2850 and then start a new descending movement towards the target at 1.2700”, wrote Roboforex.com analyst Igor Sayadov, expecting then a reversal pattern for a new ascending trend.

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