EUR/USD Analysis: Market Mood Improves But Euro Weakens on Poor Data
- Investors remain cautious despite slight improvement in market sentiment.
- European data disappoints, putting pressure on the Euro.
- EUR/USD holds above key support at 1.0900, but downside risks persist.
After a turbulent start to the week, the Euro to US Dollar (EUR/USD) exchange rate has retreated from recent highs, currently hovering near the 1.0900 level. Despite a slight recovery in market sentiment, uncertainty continues to weigh on trading activity.
Asian markets were mixed, with the Nikkei 225 outperforming the rest of the region. European equities also struggled to find direction, reflecting ongoing nervousness among investors.
US Treasury yields bounced back from recent lows, boosting the US Dollar against its major counterparts. The release of disappointing Eurozone retail sales data added to the Euro’s woes, while better-than-expected German factory orders provided some relief.
Looking ahead, technical indicators suggest a potential downside for the EUR/USD pair in the short term. While the 20 Simple Moving Average (SMA) remains above longer-term averages, bearish momentum is building, with key support levels at 1.0890, 1.0845, and 1.0800.
Resistance levels to watch include 1.0950, 1.1005, and 1.1045, with traders likely to monitor economic data releases for further direction.
Overall, the EUR/USD pair faces increased volatility and uncertainty, with potential for further downside moves in the near term. Investors should remain cautious and stay informed about market developments to make informed decisions.