EURUSD is still in a correction phase, but bearish bias persists
EURUSD started the week on a mixed note but regained momentum, continuing its steady climb from Friday’s low as risk sentiment improved. The subdued performance of the US Dollar amid slightly positive risk sentiment supported the major currency pair.
The euro hit a fresh seven-month low of 1.1412 against the USD on Friday but rebounded, trimming losses. Despite this recovery, the pair is struggling to extend gains following weak German ZEW economic sentiment data. As of this writing, EURUSD is trading above the 1.1530 area.*
Disappointing German ZEW confidence data
In the most recent survey, Germany's vital ZEW economic sentiment indicator unexpectedly went negative, reaching -0.5 points, a significant decline from 58.3 in February and well below market estimates of 39. Concerns about the intensifying conflict in the Middle East are reflected in the drop.
Looking ahead, the European Central Bank's interest rate announcement on Thursday will be the primary focus for the euro this week. Additionally, traders should closely monitor the upcoming Eurozone inflation and trade balance figures. Comments from ECB President Christine Lagarde on Thursday will also be particularly noteworthy.
EURUSD technical forecast: Cautious sentiment persists
Technically, despite the recent rebound, medium-term bearish pressure persists as long as the EURUSD remains below the crucial 1.1600/30 barrier. At this point, the currency pair will likely continue to retrace after every significant bounce, and short-term traders will continue to take advantage of this. As a result, it will be hard to rule out a further retracement back to 1.1400 if the bulls fail to extend the recovery above 1.1600/30.
1.1400 remains the primary support area to concentrate on. In other words, this is an area where we may see a lot of market interest, so we will need to pay great attention. If we break down below the 1.1400 level, it will open the doors to the 1.1300/1.1260 level.
* Past performance is no guarantee of future results.
