The currency moved little following the hot Eurozone CPI news, as investors remain cautious ahead of significant economic announcements and geopolitical turmoil. Meanwhile, the dollar bulls remain unwilling to give up. The dollar index (DXY) is hovering near multi-week highs, bolstered by stalling US-Iran peace talks and renewed Middle East tensions, keeping safe-haven demand higher.
Moving forward, euro traders should closely monitor the release of Eurozone PPI and HCOB services PMI data from the Eurozone and Germany, as well as remarks from ECB policymakers. Earlier today, Pierre Wunsch, a member of the European Central Bank's Governing Council, stated that a verified US-Iran nuclear deal before the ECB's monetary policy meeting in June would not affect the central bank's current expectations for additional interest rate hikes.
EURUSD Technical Analysis
The daily chart remains tilted to the downside and may experience further decline. Technically, the overall trend remained mixed after a slow start in the Asian session. For this week, the euro's key support appears to be around 1.1580/75. In the short term, a break below 1.1600 will allow the currency pair to reach 1.1580/75. A closing below the support level could attract technical sellers and pave the way for a prolonged downward decline towards 1.1550/40. On the other hand, 1.1640 (20-day SMA) now appears to operate as an immediate barrier, which, if overcome, might ignite a short-covering bounce. Any future increase, however, is expected to attract new sellers near the 1.1690/1.1720 level.
Bottom Line: EURUSD stalled below the 100-day SMA, sparking fresh fears of a longer chill as bears tighten their grip. For the bullish move, a weekly close above 1.1700/20 is now needed to ease bearish pressure.
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