EUR/USD remains steady near 1.1700 despite weak Eurozone economic sentiment

The Euro (EUR) maintains a moderate negative tone against the US Dollar (USD) on Wednesday, trading within a tight range around 1.1700. A sharper-than-expected deterioration of the Eurozone’s economic sentiment data is adding pressure to a pair already weighed by the cautious market mood, ahead of the US Federal Reserve’s (Fed) decision and shrinking hopes of a negotiated end to the Iran war.

The European Commission's Economic Sentiment Indicator dropped to a reading of 93.0 in April from 96.2 in March, below market expectations of a softer decline, to 95.3. Likewise, the Industrial Confidence fell to -7.7 against the market consensus of a steady -7 reading, while the Services Sentiment Index dropped to 0.9 from 4.1 in the previous month, also below the 3.8 forecasted by market analysts. On the positive side, Consumer Confidence has remained unchanged, at -20.6.

Investors are now waiting for the German preliminary Harmonized Index of Consumer Prices (HICP) for April, which is expected to show higher price pressures, adding pressure on the European Central Bank (ECB) to hike interest rates ahead of its monetary policy decision, which is due on Thursday.

The highlight of the day, however, will be the Fed’s monetary policy decision. Futures markets are fully pricing steady interest rates, according to the CME Fed Watch tool, and a nearly 80% chance that they remain at the current level in December's meeting.

The market, however, will be particularly attentive to Fed Chairman Powell’s press conference, as it is likely to be his last one. His term ends on May 15, and former Governor Kevin Warsh is expected to replace him at the next meeting. The question is whether Powell will remain in his place at the Board of Governors or will exit the bank for good as US President Donald Trump demanded.

Powell has previously affirmed that he would only remain as governor if he sees risks to the central bank’s independence.

On the geopolitical front, things remain at a standstill after Trump disliked the peace plan sent by Tehran on Monday. The US president wants to settle the nuclear issue before sealing an agreement. Meanwhile, the Strait of Hormuz is about to end its second month of closure, and The Wall Street Journal reported on Tuesday that Trump told aides to prepare for an extended blockade of Iranian ports.

Technical Analysis: Looking for direction around 1.1700

EUR/USD keeps moving back and forth in a roughly 75-pip range around 1.1700, with investors wary of taking excessive risks. Technical indicators show a neutral-to-bearish bias, although the support area below 1.1675 is providing a solid cushion so far.

The 4-hour chart hints at a soft momentum, with the Relative Strength Index (RSI) hovering below the 50 line and the Moving Average Convergence Divergence (MACD) fluctuating around the zero line with slightly negative readings.

Bulls should break session highs at 1.1720 and the April 22 and 27 highs in the 1.1750-1.1760 area to ease bearish pressure and retest the broken trendline, now at 1.1780.

Bears, on the other hand, need additional impulse to extend the downtrend from mid-April highs through a cluster of support levels between 1.1675 and 1.1650, where the pair was contained several times in early April. Below here, the next target is the April bottom between 1.1505 and 1.1525.

(The technical analysis of this story was written with the help of an AI tool.)