The excessive low activity in the service sector is no longer a surprise. Its data last Friday indicate that many economies will experience extremely difficult times, for the consequences of the pandemic will be felt for a very long time even after it has passed. Meanwhile, the data on the state of the US labor market, although disappointing, did not have any impact on the markets. This is because it was already clear that the pandemic would cause a serious increase in unemployment in the short term. The introduction of quarantine measures, as well as the closure of businesses that provide services, on the other hand, directly affects the market.

According to the IHS Markit, the purchasing managers' index (PMI) for the Italian services sector fell to a record of 17.4 points in March 2020, against 52.1 points in February this year. The index was forecasted to be at 22.0 points. Meanwhile, the situation in France is no better, as the PMI for the services sector in March fell to 27.4 points, against 52.5 points in February. The index was forecasted to be at 29.0 points. In Germany, the PMI of the services sector declined from 52.5 points in February to 31.7 points in March. It was forecasted to be at 34.3 points.

Although the indicators are in a deplorable state and indicate a sharp decrease in activity, we can expect a rapid increase in the indices, as soon as the quarantine measures are removed and the pandemic has been won over. The spread of the virus in the Eurozone may reach its peak in the beginning of summer this year.

Taking into account all the data, the PMI of the services sector of Eurozone fell to 26.4 points in March, as compared to its 52.6 points in February. It was forecasted to be at 28.4. The composite PMI, on the other hand, which takes into account the manufacturing index, fell to 29.7 points in March, from 51.6 points in February.

As for business activity in the services sector of US, there is still a record decline, even with all the efforts that were aimed at curbing the spread of the coronavirus. According to IHS Markit, the PMI in March was at 39.8 points, against its 49.4 points in February. The agency expects that activity will continue to decline even further in the coming months. Meanwhile, the report of ISM is not as bad as IHS Markit's, as the business activity sub-index fell to only 48 points, while the employment sub-index fell to 47 points. However, in general, a reading below 50 indicates a decline in activity.

Although there's a serious increase in unemployment in US, the stock markets are calm because many traders and economists expect a rapid recovery after the pandemic. They believe that the decrease in the number of employed, as well as new jobs, is only temporary.

The US Department of Labor, on the other hand, reported that the number of jobs outside US agriculture fell by 701,000 in March 2020. This could lead to new record levels of unemployment in the country, which has already risen to 4.4% against 3.5% in February.

However, note that these data do not fully disclose all the problems that await the labor market. The data will still be adjusted due to the layoffs associated with the coronavirus pandemic.

As for the technical picture of EUR/USD, we should not expect an active decline along the trend today. Apparently, the buyers of risky assets were waiting for reports that could further collapse the pair. As it did not happen, they will now act more actively, counting on the recovery of the pair after the decrease in the pandemic crisis. The nearest resistance is the area of 1.0840, where a breakout can return the euro to the highs of 1.0900 and 1.0960. If the pressure on the pair persists, the major support level will be the area of 1.0720. Below it is the annual low of 1.0635.