Business activity in the Eurozone returned to growth last month, buoyed by a record expansion in the manufacturing sector, according to data from a survey Wednesday afternoon showed that the services industry is handling new shutdowns better than expected.
As Europe battles a third wave of coronavirus infections, governments have reimposed restrictions on citizens and forced sectors of the service industry to remain in lockdown.
But the Services Purchasing Managers' Index (PMI) rose to 49.6 in March from 45.7 in February, higher than the flash estimates of 48.8 and just below the 50 level that separates growth from contraction. The composite PMI, which combines manufacturing and services which is a good barometer of economic health, rose to 53.2 from 48.8, also higher than the flash estimates of 52.5.
Another survey last week showed that factory activity growth was at the fastest pace in its nearly 24-year history for the PMI in March, despite supply chain disruptions and renewed shutdowns in the region.
Despite the slow roll-out of the vaccine and the increase in cases of coronavirus, optimism improved for the coming year, as the future composite index rose to 67.9 from 67.0, its highest level since February 2018.
EUR USD interacted with the data, rising to 1.1881 levels, its highest level since March 23, and is currently testing a resistance level at 1.1875, and with the price's success in breaching that level, it may push it targeting the next resistance level at 1.1945. In the short term, 1.18/1.1830 levels remain supportive of the continuation of the EURUSD rise if it remains above it.
However, any return to trade below the 1.18 levels, may cause prices to head visiting the 1.17 levels again.