EUR/USD Price Forecast: Dismal US data spurs risk aversion

EUR/USD Current price: 1.1366

• The preliminary United States Q1 Gross Domestic Product resulted worse than anticipated.
• Eurozone data failed to impress, but there are no signs of a possible recession coming up.
• EUR/USD remains neutral below 1.1400, trapped between risk aversion and USD weakness.

The EUR/USD pair spent the first half of the day consolidating around 1.1380, with market participants on hold ahead of multiple first-tier data releases. Growth, inflation and employment figures coming from both shores of the Atlantic.

The Eurozone (EU) released the preliminary estimate of the Q1 Gross Domestic Product (GDP), showing the economy expanded by 0.4% in the three months to March of 2025 after growing by 0.2% in the fourth quarter of 2024. The readings surpassed the market’s expectations of 0.2%. Germany also released the preliminary Q1 GDP, which showed the economy grew by 0.2% in the quarter, matching expectations.

Meanwhile, the preliminary estimate of the April German Harmonized Index of Consumer Prices (HICP) showed a monthly uptick of 0.4%, higher than the 0.3% previous. The annual reading printed at 2.1%, easing from the 2.2% posted in March.

Additionally, the United States (US) published the ADP Employment Change report, which showed that the private sector added 62K new job positions in April, much worse than the 108K anticipated by market participants. The preliminary estimate of the US Q1 GDP also missed expectations, as the economy contracted at an annualized pace of 0.3% against the anticipated 0.4% expansion.

Financial markets turned risk-averse with the news, with Wall Street under strong selling pressure. The dismal sentiment limits demand for high-yielding Euro (EUR) while demand for the USD is also subdued, leaving EUR/USD lifeless below the 1.1400 mark.

EUR/USD short-term technical outlook

The daily chart for the EUR/USD pair shows that it remains confined to a tight 50 pips range, down yet with the bearish potential still well limited. The pair keeps developing above all its moving averages, with a firmly bullish 20 Simple Moving Average (SMA) providing dynamic support at around 1.1265. The longer moving averages stand over 600 pips below the current level, slowly grinding north, in line with the dominant bullish trend. Technical indicators, on the contrary, keep easing within positive levels, suggesting the pair may ease further, yet is unlikely to slide below the 1.1300 support area.

The 4-hour chart for EUR/USD offers a neutral stance. The pair seesaws around a flat 20 SMA, while the 100 SMA extends its advance below the current level. Technical indicators, in the meantime, head nowhere at around their midlines, reflecting the absence of directional strength.

Support levels: 1.1330 1.1300 1.1260

Resistance levels: 1.1425 1.1470 1.1510