EUR/USD Current price: 1.1333
- Economic Sentiment in the EU plummeted in April according to the ZEW Survey.
- Financial markets are optimistic despite persistent tensions between the US and China.
- EUR/USD’s corrective decline likely to be short-lived given broad USD weakness.
The EUR/USD pair trades with a softer tone on Tuesday, despite persistent US Dollar (USD) weakness. The pair retreated further from its recent multi-month peak at 1.1473 and trades in the 1.1320 region early in the American session. The Euro (EUR) is among the worst performers against the USD, as data coming from the Eurozone (EU) fell short of impressive.
Germany released the April ZEW Survey on Economic Sentiment, which plunged to -14 after posting 51.6 in March. The assessment of the current situation index improved to -81.2 from -87.6 previously. Finally, the EU Economic Sentiment fell to -18.5, much worse than the previous 39.8 or the 14.2 expected.
Other than that, market players recovered their good mood. Hopes that the White House will add more tariffs exemptions to de-escalate the trade war kept stocks afloat. Tensions with China, however, are meant to persist.
Across the pond, the United States (US) published the April NY Empire State Manufacturing Index, which improved to -8.1 from the previous -20. Finally, European Central Bank (ECB) President Christine Lagarde will make a public appearance, and may comment on monetary policy ahead of the central bank’s meeting next week.
EUR/USD short-term technical outlook
The EUR/USD pair extends its consolidative phase. The daily chart shows the pair holds within Monday’s range, posting modest intraday losses. Still, technical indicators in the same time frame hold at extreme overbought levels, without clear directional strength. At the same time, EUR/USD develops far above all its moving averages, with a firmly bullish 20 Simple Moving Average (SMA) advancing above the 100 and 200 SMAs, which turned marginally higher.
In the near term, and according to the 4-hour chart, the EUR/USD seems poised to correct marginally lower, yet given the limited USD strength, the slide will likely be short-lived. A bullish 20 SMA provides support at around 1.1310, while holding far above also bullish longer ones. Finally, the Momentum indicator kept retreating and currently pressures its 100 line, while the Relative Strength Index (RSI) indicator hovers around 59, not enough to support a steeper decline.
Support levels: 1.1310 1.1285 1.1240
Resistance levels: 1.1370 1.1425 1.1470
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