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- EUR/USD drifts to session lows near 1.1750 on Tuesday but maintains its upside bias intact.
- Investors remain cautious ahead of the ZEW Survey and the US-Iran peace talks.
- Eurozone economic sentiment is expected to have remained downbeat in April.
The Euro (EUR) extends losses against the US Dollar (USD) on Tuesday, reaching session lows right above 1.1750 at the time of writing after failing to extend Monday’s gains past 1.1790. Investors have adopted a “wait-and-see” mode, awaiting the release of Eurozone economic sentiment data and developments from the US-Iran peace talks.
The Wall Street Journal affirmed that Tehran told regional mediators that they will send a delegation to Pakistan after threatening to pull out from the process on Monday, following the seizure of an Iranian cargo vessel by the US military. Beyond that, Reuters cited an anonymous US source, affirming that “things are moving forward”, altogether, feeding a moderate market optimism.
In the Eurozone, the German and Eurozone ZEW Economic Sentiment Survey is expected to show downbeat figures in April, highlighting the negative economic impact of the energy shock stemming from the conflict in the Middle East.
The German Economic Sentiment Index is expected to have deteriorated to -5, its weakest reading in the last 12 months, from -0.5 in March. In the Eurozone, the reading is seen improving to -3.6, from -8.5 in the previous month, but still at negative levels, pointing to a pessimistic view about the near-term outlook.
Technical Analysis: Sideways consolidation below 1.1800
EUR/USD maintains its upside trend from the late-March lows intact, but recent price action shows some hesitation ahead of the 1.1800 area. Technical indicators in the 4-hour chart are also hinting at a weakening upside momentum.
The Relative Strength Index has been moving back and forth around the 50 midline, pointing to a lack of clear bias. The Moving Average Convergence Divergence (MACD) remains at its slightly negative levels, showing a fading upside pressure rather than a decisive bearish turn, at least for now.
Bulls have been capped at 1.1790 area earlier on Tuesday, which is closing the path towards Friday’s highs near 1.1850 for now. On the downside, immediate support is located at Monday’s lows near 1.1730, followed by the upward-sloping trendline, now around 1.1705. A clear break below this area would open the way towards a cluster of support levels between 1.1645 and 1.1675, which held bears on April 8, 9, 10, and 13.
