EUR/USD is trading lower by 0.08% as the market reacts to the lower-than-expected German ZEW economic sentiment. The index measures the economic outlook of Europe’s largest economy over a span of six months.
Analysts expected April’s reading to come in at 79.0; higher than the previous month’s 76.6. However, at 70.7, this is the first time that the figure has missed the estimates since November 2020. Similarly, Eurozone’s ZEW economic sentiment is at 66.3 compared to last month’s 74.0.
The focus is now on the US inflation data that is scheduled for release later in the day. The forecasted 0.2% is higher than February’s 0.1%. The US dollar is up by 0.07% at 92.15 ahead of the core CPI data.
EURUSD Technical Forecast
While EUR/USD is trading lower by 0.08% at 1.1901, it is above the 25 and 50-day exponential moving averages. Notably, the pair is within a rectangular pattern, whose formation began a week ago. As such, the outlook remains rather neutral.
A significant increase in buying pressure is needed for the price to break out past the current resistance level of 1.1928. If successful, the bulls will have their next target at 1.2000. Failure to yield adequate buying pressure will have the pair remain range-bound in the near term.
However, this thesis will be invalidated if EUR/USD moves past its current support level of 1.1860 and falls below 1.1850. If that happens, the levels to watch out for will be 1.1800 and 1.1700.