- US Dollar Index recovers modestly in the NA session.
- Upbeat data and Fed commentary support the greenback.
- Germany's Bundesbank confirms slowdown in economic growth.
After spending the majority of the day moving sideways in a narrow band above the 1.13 handle, the EUR/USD pair came under modest bearish pressure in the last hour and was last seen trading at 1.1302, where it was virtually unchanged on a daily basis.
Earlier today, Germany's Bundesbank in its monthly report said that the economy grew "moderately" in the first quarter and reiterated that the underlying growth trend remained subdued in that period. Meanwhile, in an interview with the French daily, Le Figaro, European Central Bank (ECB) Governing Council member and Bank of France Head Villeroy de Galhau echoed President Draghi's remarks from the last ECB meeting by saying that the monetary policy must remain accommodative.
Nevertheless, the shared currency didn't have a hard time staying resilient against the dollar as the upbeat market sentiment didn't allow the greenback to gather strength. European Union (EU) Trade Commissioner Cecilia Malmstrom today announced that the EU was ready to move on the next phase of trade talks with the U.S.
On the other hand, today's data from the U.S. revealed that the NY Fed's Empire State Manufacturing Index rose to 10.1 in April from 3.7 in March to help the US Dollar Index start recovering its daily losses. Moreover, in an interview with CNBC, Chicago Fed President Evans said that the U.S. economy was looking stronger than it did in December. "I'm looking for 1.75%-2.00% growth this year," Evans added. At the moment, the DXY is up 0.1% on the day at 96.95, forcing the pair to stay near its daily lows.
Technical outlook by FXStreet Chief Analyst Valeria Bednarik
In the 4 hours chart, technical indicators have lost upward strength but hold within positive ground, while the price holds above all of its moving averages, with the 20 SMA heading north above the 100 SMA and about to surpass the 200 SMA, all of them below the current level. Above the daily high, the pair has room to extend its advance up to the 1.1350 price zone, the 61.8% retracement of the mentioned decline.
Support levels: 1.1285 1.1245 1.1200
Resistance levels: 1.1320 1.1350 1.1385
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