EUR/USD Price Forecast: Buyers paused amid tepid German data, limited downward scope

Valeria Bednarik FXStreet

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

Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

AUD/USD breaks below 0.7000 ahead of inflation data

AUD/USD has accelerated its downward trend on Tuesday, breaching below the key 0.7000 yardstick ahead of the opening bell in Asia on Wednesday. Indeed, spot has retreated for the second day in a row despite the hawkish hike by the RBA early on Tuesday and in response to the continuation of the move higher in the Greenback. Looking ahead, all the attention will be on the release of Australia’s inflation data on Wednesday.

USD/JPY consolidates near 157.50 as a bullish USD counters intervention risks

USD/JPY struggles to capitalize on the overnight bounce from a one-week low, consolidating around 157.50 in the Asian session on Tuesday. Trump's concerns about the Japanese Yen's weakness fueled speculation about another US-Japan joint intervention. This, along with the hawkish BoJ, underpins the JPY and caps the currency pair. Meanwhile, rising Fed rate-hike bets and oil-driven inflation fears continue to push US bond yields to multi-year highs, keeping the US Dollar pinned near a two-month high and supporting the pair.

Gold trims gains; back toward $4,150

Gold now surrenders some of its initial advance and retests the $4,150 zone per troy ounce on Tuesday. Meanwhile, the move higher in the yellow metal comes despite the firmer US Dollar and rising US Treasury yields across the board, while escalating geopolitical tensions appear to limit the downside potential.

XRP advances within a robust technical structure

Ripple (XRP) shows signs of stabilizing after reclaiming support at $1.50 on Tuesday. A robust technical structure underpins the token’s short to medium-term bullish outlook. Still, XRP is not out of the woods yet, as profit-taking and buyer exhaustion could weigh on price action and extend the recent correction from September highs around $1.66.

RBA recap: Rate hikes are on the table as demand stays too strong

The Reserve Bank of Australia unanimously tightened monetary policy, warning that inflation remained too high and that several upside risks had begun to materialise. Governor Michele Bullock said the Board would raise rates again if necessary.

Silver is more volatile than Gold ahead of PCE and NFP. This chart shows the positioning gap

The market’s attention is focused on American data this week, but there’s something only those with a trained eye may be looking at: Gold and Silver positioning gap. Financial markets are moving on fears, mostly related to persistently high energy prices driven by the Middle East war. Sure, the US Dollar (USD) is strong, but at what cost?