EUR/USD under pressure at $1.12

The euro was trading lower for a second straight session as German IFO business climate indicator unexpectedly declined in April

The euro was trading lower for a second straight session as German IFO business climate indicator unexpectedly declined in April. German business leader’s confidence in the eurozone economy took a turn for the worse, dropping to 99.2 in April, from 99.7 in March and missing expectations of 99.9.

Confidence has now declined in seven out of eight months and has fallen as manufacturing has also markedly deteriorated. Weakness in Europe’s largest economy is being reflected in the data. Today’s stats combined with yesterday’s weakening consumer confidence for the eurozone is painting a gloomy picture for the bloc.

With Germany’s GDP slashed to just 0.5% down from 1% and inflation for the bloc at 1.4% the ECB will be in no rush to start hiking rates anytime soon. US data on the other hand is showing signs of a resilient economy with retail sales and new home sales surprising to the upside.

The dollar is once again dominant, leaving the EUR/ USD struggling with $1.12 and under pressure. EUR/USD trades below the 50, 100 and 200 simple moving averages. Momentum is clearly to the downside and the RSI is leaning lower. Near term support can be seen at $1.1205. A break through here could open the doors to $1.1185 followed by $1.1175, the lowest point so far this year. 

On the upside $1.1230 serves as a near term cap beyond which $1.1260/5, this week’s high could also act as a resistance.

Build your confidence risk free
Join our live webinars for the latest analysis and trading ideas. Register now

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.