The Euro (EUR) extends losses against the US Dollar (USD) on Tuesday, reaching session lows a few pips above 1.1750 at the time of writing after failing to extend Monday’s gains past 1.1790. A gloomy ZEW Economic Sentiment Survey released earlier on the day has increased bearish pressure on the common currency, highlighting the negative impact of the US-Iran war.
Data released by the ZEW Institute on Tuesday revealed that institutional investors’ sentiment about the German economy has plunged to -17.2 in April, its weakest reading since December 2022, well below the -5 forecasted by market analysts, following a -0.5 reading in March. The feeling about the current economic situation also declined, to -73.7 in April, from -62.9 in March.
Likewise, the Eurozone Economic Sentiment has dropped to -20.4, also its weakest reading since December 2022. The market was expecting a moderate improvement to -3.6 from last month’s -8.5 print.
Concerning the geopolitical situation, the Wall Street Journal reported on Monday that Tehran conveyed to regional mediators its willingness to send a delegation to Pakistan. Iranian authorities had threatened to pull out of the peace process on Monday, in retaliation for the seizure of an Iranian cargo vessel by the US military.
Beyond that, Reuters cited an anonymous US source, affirming that “things are moving forward”, altogether, feeding a moderate market optimism.
Technical Analysis: Sideways consolidation below 1.1800
EUR/USD maintains its upside trend from the late-March lows intact, but recent price action shows some hesitation ahead of the 1.1800 area. Technical indicators in the 4-hour chart are also hinting at a weakening upside momentum.
The Relative Strength Index has been moving back and forth around the 50 midline, pointing to a lack of clear bias. The Moving Average Convergence Divergence (MACD) remains at its slightly negative levels, showing a fading upside pressure rather than a decisive bearish turn, at least for now.
Bulls have been capped at 1.1790 area earlier on Tuesday, which is closing the path towards Friday’s highs near 1.1850 for now. On the downside, immediate support is located at Monday’s lows near 1.1730, followed by the upward-sloping trendline, now around 1.1705. A clear break below this area would open the way towards a cluster of support levels between 1.1645 and 1.1675, which held bears on April 8, 9, 10, and 13.
(The technical analysis of this story was written with the help of an AI tool.)
Economic Indicator
ZEW Survey – Economic Sentiment
The Economic Sentiment published by the Zentrum für Europäische Wirtschaftsforschung measures the institutional investor sentiment, reflecting the difference between the share of investors that are optimistic and the share of analysts that are pessimistic. Generally speaking, an optimistic view is considered as positive (or bullish) for the EUR, whereas a pessimistic view is considered as negative (or bearish).
Read more.
Economic Indicator
ZEW Survey – Economic Sentiment
The Economic Sentiment published by the Zentrum für Europäische Wirtschaftsforschung measures the institutional investor sentiment, reflecting the difference between the share of investors that are optimistic and the share of analysts that are pessimistic. Generally speaking, an optimistic view is considered as positive (or bullish) for the EUR, whereas a pessimistic view is considered as negative (or bearish).
Read more.
Read the full article here
