The euro has been moving within a narrow range as traders look ahead to a week of important economic data and US earnings reports. Key events like eurozone inflation and GDP figures, along with potential shifts in US stocks, could influence the currency’s next move.
The euro remained firmly within a narrow trading range on Monday as currency traders prepared for a week filled with significant macroeconomic data and corporate earnings reports.
The EUR/USD pair dipped to USD 1.1344, continuing to hover around crucial technical levels without displaying a clear directional trend.
Chris Turner from ING highlighted that the European Central Bank’s upcoming inflation expectation survey, set to be released on Tuesday, could indicate easing price pressures.
However, the core inflation figures for April, due on Friday, may show a slight increase, which could complicate the outlook for monetary policy.
Adding to the cautious sentiment, the first-quarter GDP figures for the eurozone are expected on Wednesday. These numbers will provide a crucial insight into the region’s economic resilience amid growing global uncertainties.
In addition to the European data, earnings reports from major US corporations will take centre stage. High-profile companies like Amazon, Microsoft, Apple, and Meta are all scheduled to announce their results, and significant movements in the stock market could impact the foreign exchange markets.
Turner noted that US equities and the dollar have been positively correlated in recent times, meaning strong tech earnings could lead to a stronger dollar, even if it comes at the euro’s expense.
The EUR/USD pair has remained range-bound, trading between 1.13808 and 1.13156 in recent sessions.
Currently, it is hovering around 1.13436, following a sharp drop towards the lower end of the range.
The MACD momentum indicator is shifting into bearish territory, while the 5, 10, and 30-period moving averages are all pointing downward, signalling increasing downside pressure.
Despite several attempts to break higher, sellers have remained active around the 1.1380 level.
The inability to sustain gains, combined with steady compression near the middle of the range, suggests that a breakout could be imminent.
If the support at 1.1315 is breached, the pair may quickly test the 1.1290 level.
For the short term, the bias is neutral to bearish, unless buyers can reclaim the 1.1360 level with strong upward momentum.
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