- Retail sales in the eurozone stays unchanged in March.
- Sentix Investor Confidence in the euro area rebounds in May.
- US Dollar Index stays in the upper half of the daily range.
The EUR/USD pair turned south in the early Asian session on Monday but didn’t have a difficult time recovering its losses with the shared currency staying resilient against the greenback supported by today’s upbeat macroeconomic data releases. As of writing, the pair was virtually unchanged on a daily basis at 1.12.
Earlier in the day, the data published by the Eurostat showed that retails sales in the euro area stayed unchanged in March to come in slightly better than the market expectation for a decline of 0.1%. Additionally, the IHS Markit’s Services PMI came in a 52.8 in April’s final reading to better the market forecast of 52.5.
Finally, Sentix Investor Confidence in May rebounded to 5.3 from -0.3 in April. “Fears of a recession are thus receding into the background, which is reflected in the improved situation values in all the regions considered. We can also report further stabilisation for the eurozone,” Sentix noted in its publication.
On the other hand, escalating geopolitical tensions amid fears of the U.S. and China staying locked in a trade dispute weighed on the market sentiment and didn’t allow the pair to gain traction. With the greenback capitalizing on risk-off flows, the US Dollar Index erased a portion of last Friday’s drop and was last up 0.1% on the day at 97.60.
On Tuesday, factory orders data from Germany will be looked upon for fresh impetus. The only data from the U.S. will be the IBD/TIPP Economic Optimism Index.
Technical outlook by FXStreet Chief Analyst Valeria Bednarik
The pair trades just a few pips above the 38.2% retracement of its latest daily slide, seesawing around a mild bearish 20 SMA in the 4 hours chart. The 100 and 200 SMA in the mentioned chart maintain their bearish slopes above the current level, while technical indicators are stuck to neutral levels without directional strength. The upcoming direction will likely come from equities’ reaction to weekend news, as further indexes declines could end up benefiting the greenback.
Support levels: 1.1190 1.1155 1.1110
Resistance levels: 1.1240 1.1280 1.1320
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