EUR/USD Price Forecast: Struggling for direction amid tepid US data, Middle East crisis

Valeria Bednarik FXStreet

EUR/USD Current price: 1.1560

The German ZEW survey showed an unexpected improvement in economic sentiment.
US Retail Sales fell by 0.9% in May, worse than anticipated and weighing on the USD.
EUR/USD trades range-bound around 1.1550, risk skews to the upside.

The EUR/USD pair trades in a tight range on Tuesday, although pressuring an intraday high at 1.1571, as the US Dollar (USD) retains its broad weakness. Market participants maintain their eyes on the Middle East, amid the escalating conflict between Israel and Iran. Missiles keep flying back and forth throughout the Asian session and despite headlines indicating Iran seeks to de-escalate hostilities and negotiate on Monday.

Meanwhile, Germany released the June ZEW, which showed Economic Sentiment improved to 47.5 from the previous 25.2, also better than the 35 expected. Economic Sentiment in the EU rose to 35.3 from the 11.6 posted in May. Finally, the assessment of the current situation index printed at -72, beating the expected -74 and improving from the previous -82.

Across the pond, the United States (US) released May Retail Sales, which fell by 0.9% in the month, much worse than the previous -0.1% slide or the -0,7% expected.

EUR/USD short-term technical outlook

The EUR/USD pair peaked at 1.1581 following the release of US data, but quickly returned to the current 1.1560 area. The daily chart shows the pair is barely up, although still well-above all its moving averages. The 20 Simple Moving Average (SMA) retains its upward slope far above the 100 and 200 SMAs, in line with the dominant bullish trend. Finally, technical indicators head modestly higher, well above their midlines, lacking momentum yet still favouring an upward extension.

In the near term, and according to the 4-hour chart, EUR/USD is neutral-to-bullish. The pair is currently seesawing around a flat 20 SMA, while above bullish 100 and 200 SMAs. Technical indicators, in the meantime, aim marginally higher just above their midlines, skewing the risk to the upside without confirming another leg north.

Support levels: 1.1530 1.1490 1.1440

Resistance levels: 1.1600 1.1640 1.1685

Premium

You have reached your limit of 3 free articles for this month.

Start your subscription and get access to all our original articles.

Subscribe to Premium Sign In

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.

EUR/USD holds losses below 1.1850 ahead of FOMC Minutes

EUR/USD stays on the back foot below 1.1850 in the European session on Wednesday, pressured by renewed US Dollar demand and reports that ECB President Lagarde will step down before the end of her term. Traders now look forward to the Minutes of the Fed's January monetary policy meeting for fresh signals on future rate cuts.

GBP/USD defends 1.3550 after UK inflation data

GBP/USD is holding above 1.3550 in Wednesday's European morning, little changed following the UK Consumer Price Index (CPI) data release. The UK inflation eased as expected in January, reaffirming bets for a March BoE interest rate cut, especially after Tuesday's weak employment report.

Gold retains bullish bias amid Fed rate cut bets, ahead of Fed Minutes

Gold sticks to modest intraday gains through the early European session, reversing a major part of the previous day's heavy losses of more than 2%, to the $4,843-4,842 region or a nearly two-week low. That said, the fundamental backdrop warrants caution for bulls ahead of the FOMC Minutes, which will look for more cues about the US Federal Reserve's rate-cut path.

Pi Network rally defies market pressure ahead of its first anniversary

Pi Network is trading above $0.1900 at press time on Wednesday, extending the weekly gains by nearly 8% so far. The steady recovery is supported by a short-term pause in mainnet migration, which reduces pressure on the PI token supply for Centralized Exchanges. The technical outlook focuses on the $0.1919 resistance as bullish momentum increases.

Mixed UK inflation data no gamechanger for the Bank of England

Food inflation plunged in January, but service sector price pressure is proving stickier. We continue to expect Bank of England rate cuts in March and June. The latest UK inflation read is a mixed bag for the Bank of England, but we doubt it drastically changes the odds of a March rate cut.

Top 3 Price Prediction: Bitcoin, Ethereum, and Ripple face downside risk as bears regain control

Bitcoin, Ethereum, and Ripple remain under pressure on Wednesday, with the broader trend still sideways. BTC is edging below $68,000, nearing the lower consolidating boundary, while ETH and XRP also declined slightly, approaching their key supports.