Today EUR corrected downwards against USD in light of the news that the unemployment rate in Germany stayed flat in March, though it could have been worse than the consensus. Earlier in the week, traders got to know negative macroeconomic data on the German economy. On Thursday, following a batch of data from Germany, investors decided to lock in profits on long positions which were opened in the wake of yesterday's policy statements of the Federal Reserve. Importantly, tomorrow is the final day of April. The question is how investors will trade following a rapid rally unfolding throughout this month. If EUR/USD manages to approach the level of 1.2200, the market will sustain demand for risky assets in early May. Any correction below the level of 1.2110 could derail short-term expectations of speculators.
Now let's discuss the technical picture. The euro bulls have coped with the main task in the second half of the day. They secured control over support of 1.2110. From now on, the price is expected to continue its climb towards highs of 1.2180 and 1.2240. However, something should be done to make the price reach the swing high today. I guess, as long as EUR/USD approaches this level, the sellers will get on edge that will eventually activate stop losses and encourage a further uptrend. If the trading instrument comes under pressure again, the bulls will have to make efforts to protect support of 1.2110. If broken, the currency pair will come under pressure again and sink to the low of 1.2055, heading for 1.2000.
When it comes to macroeconomic data released today, the unemployment rate in Germany stayed flat in March at 4.5%. In other words, roughly 2 million unemployed people searched for jobs in March that was 5,000 more than in February. The number of jobless people increased by 374,000 or 22.4% in March 2021 from a year ago. The report also reads that employment declined by 1.4% in March or by 628,000 people on year.
In another report presented by Destatis, import prices in Germany grew in March at the fastest rate for almost a decade. The surge mainly comes as a result of soaring energy prices. The import price index climbed 6.9% in March on a yearly basis, much stronger than a 1.4% growth in February. Such acceleration is propelled by a 56.7% surge of energy prices. Excluding this factor, the core import price index rose just 3%.
The highlight of the European session today is a survey on economic confidence in the EU. The economic sentiment index increased sharply in April that enabled EUR/USD to stall its downward correction during the European trade. According to the survey from European Commission, the economic sentiment index skyrocketed to 110.3 in April following 110.9 points in March. The survey reveals that European entrepreneurs expect robust economic recovery in the eurozone in Q2 2021 thanks to progress in the vaccination campaign that embraces all countries in the EU. Besides, all polled entrepreneurs in various economic sectors admitted improvement of business morale. The confidence index of manufacturers surged to 10.7 from 2.1. The confidence index for the service sector stood at 2.1 in April from -9.6 in March.
The pound sterling asserted strength against the US dollar, though GBP gains were subdued at around strong resistance of 1.3970. Today the spokesman of British Prime Minister Boris Johnson said in the interview that research is required before the government greenlights socializing of vaccinated people in public premises. Another factor to weigh on GBP is statements that the UK still needs to maintain some restrictions to realize whether the vaccine is actually efficient. The UK authorities are planning to lift restrictions in full in the mid-summer 2021 as more than half of the adult population will have received both doses of the vaccine by that time. Meanwhile, 64.5% of the Britons have been provided with the first dose.
When it comes to the technical picture of GBP/USD, the price has failed to climb above resistance of 1.3970. The main aim of GBP/USD buyers is that area. If the bulls manage to push the price higher, the currency pair is likely to extend the bullish trend towards 1.4020 and 1.4065. If not, the buyers will have to defend support of 1.3970 as further price action depends on this level. If broken, the pressure on GBP will escalate that will drag down the price towards 1.3860 and 1.3800.