- Mixed ZEW data weighs on the shared currency.
- Policymakers said to question ECB's growth forecasts.
- US Dollar Index rebounds above 97 in the NA session.
The EUR/USD pair struggled to gain traction during the European trading hours amid mixed macroeconomic data releases and ECB headlines but inched higher in the early NA session as the upbeat market sentiment weighed on the USD, which has been finding demand as safe-haven lately. However, the pair failed to preserve its momentum in the absence of fundamental drivers and was last seen losing 0.16% on a daily basis at 1.1288.
Earlier today, the ZEW's monthly survey showed that the Economic Sentiment Index rose more than expected both in Germany and the euro area in April. However, the Current Situation Index in Germany slumped to 5.5 in April from 11.1 in March.
Commenting on the data, “The Current Situation Index falling to 5.5, its lowest level since 2014, while the Expectations Index improved back into positive territory at 3.1 for the first time in just over a year. Details show that there were no major downside moves within industries, but both the Construction and Services sectors rose sharply in the month,” TD Securities analysts said.
Additionally, citing unnamed sources with knowledge of the matter, Reuters today reported several policymakers questioned the ECB's projection model and were sceptical about a potential recovery in the second half of the year.
In the second half of the day, the pair turned north and erased its daily losses with the greenback weakening against its rivals amid risk-on flows. Nevertheless, the US Dollar Index staged a technical correction in the last few hours and rose above the 97 handle, causing the pair to return to the lower half of its daily range.
Technical outlook by FXStreet Chief Analyst Valeria Bednarik
From a technical point of view, the pair tested the key 1.1280 support area before bouncing some, battling with the 1.1300 level and still capped by a Fibonacci resistance and its recent highs around 1.1310/20. In the 4 hours chart, technical indicators declined further within positive ground, while the price briefly pierced a bullish 20 SMA, now back above it. The risk is skewed to the downside, yet further slides should be confirmed on another attempt to break below the mentioned 1.1280 price zone.
Support levels: 1.1280 1.1245 1.1200
Resistance levels: 1.1320 1.1350 1.1385
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