The euro (EUR) bounced back around the 1.1790 mark on Monday but took a hit against the dollar (USD) on Tuesday, dipping below 1.1750 as of the latest updates. Concerns regarding the fragile ceasefire between the US and Iran caused the safe-haven US dollar to strengthen, yet mixed data on Germany’s economic sentiment from ZEW Institute didn’t provide the euro with much support.
As per the ZEW Institute’s data, institutional investor sentiment for the German economy improved slightly from -17.2 in April to -10.2, then dropped to -19.8 in May, which was unexpected. However, the sentiment concerning the current economic conditions worsened from -73.7 in April to -77.8 in May—marking a five-month low and falling short of the expected -77.5.
Market mood turned sour on Tuesday after US President Donald Trump mentioned that the ceasefire is “on life support.” Furthermore, reports surfaced that he is seriously contemplating a return to military operations.
Later in the day, attention will likely shift to the US Consumer Price Index (CPI). Projections indicate consumer inflation may rise to an annual rate of 3.7% in April—the highest since September 2023. Core inflation is predicted to increase from 2.6% in March to 2.7% year-on-year, which is notably above the Federal Reserve’s 2% interest rate target.
The next support sits around 1.1725
From a technical standpoint for EUR/USD, bearish momentum appears to be gaining traction on the 4-hour chart. The Relative Strength Index (RSI) hovering near 46 indicates that bullish pressure is easing, and the Moving Average Convergence Divergence (MACD) has slipped into negative territory, suggesting the upward momentum might be fading.
On the downside, significant support stands at Friday’s low of roughly 1.1725, with a crucial support range between 1.1645 and 1.1675—where sellers had previously been active multiple times in April. On the upside, resistance is expected around 1.1790 to 1.1800, likely testing the upper limits ahead of the April peak near 1.1850.
(Technical analysis for this piece was generated using AI tools.)
