On Wednesday, the euro (EUR) gained over 0.5% against the US dollar (USD), trading at 1.1760 after peaking at 1.1770 earlier in the session. Hopes are growing that the ongoing conflict between the US and Iran might be winding down, which has brought some weakness to the dollar. Additionally, positive data regarding the euro zone’s producer price index (PPI) has provided further support for the euro.
According to data released by Eurostat, producer prices rose from -3% year-on-year in February to a surprising 2.1% in March, exceeding the anticipated 1.8%. This increase highlights inflationary pressures stemming from the Iran conflict and suggests that the European Central Bank (ECB) may consider further interest rate hikes. Month-on-month, producer prices jumped from -0.6% to 3.4%, marking the highest increase in about four years and surpassing expectations of 3.3%.
Earlier today, the final reading of the Eurozone’s HCOB Services Purchasing Managers’ Index (PMI) indicated a contraction in service activity for April, though the decline was slower than initially estimated, with a reading of 47.6 compared to a preliminary figure of 47.4. Meanwhile, Germany’s services sector PMI held steady at 46.9, and service activity in both France and Italy displayed numbers that align with the overall contraction trend.
Investors welcomed US President Donald Trump’s comments about pausing escort operations for ships through the Strait of Hormuz, alongside assurances of advancements in peace discussions with Iran. Additionally, US Secretary of State Marco Rubio announced the cessation of offensive actions, effectively signaling a retreat from any plans to reignite fighting.
Technical Analysis: Bulls face resistance around 1.1790
Currently, EUR/USD appears to be in a positive short-term trend following a strong bullish response from lows near 1.1675 earlier this week. However, it remains underneath the resistance level of 1.1790, which has capped its movement over the past two weeks.
Positive momentum indicators are evident; the 4-hour Relative Strength Index (RSI) is around 65, while the Moving Average Convergence Divergence (MACD) histogram is showing increasing upward momentum. However, the bulls will likely face a challenge at the stated resistance near 1.1790 (previous highs from April 20th and May 1st), beyond which lies the April 17th high of roughly 1.1850, with an additional target set at around 1.1930, which was last seen on February 10. On the downside, the daily low is positioned at 1.1690, with critical support likely in the region of 1.1645 to 1.1675, an area that has seen several tests throughout April.
economic indicators
HCOB Service PMI
The Services PMI, produced by Hamburg Commercial Bank (HCOB), serves as a key indicator of business activity within the eurozone’s services sector. This index is particularly significant as it reflects a major slice of the overall economy. The data is drawn from surveys of senior executives in the service sector, capturing changes relative to the prior month and helping to forecast trends in vital indicators like GDP and inflation. The index fluctuates between 0 and 100, with 50.0 indicating no change; readings above signify expansion, while those below indicate contraction.
Final release:
Wednesday, May 6, 2026 08:00
Frequency:
monthly
Actual:
47.6
Consensus:
47.4
Previous:
47.4
economic indicators
Producer Price Index (month-on-month)
The Producer Price Index (PPI), released by Eurostat, measures the changes in prices received by domestic producers of goods at all stages of production—whether it’s raw materials, intermediate goods, or finished products. Generally, high PPI figures are seen as favorable for the euro, while low values can be regarded negatively.
Final release:
Wednesday, May 6, 2026 09:00
Frequency:
monthly
Actual:
3.4%
Consensus:
3.3%
Previous:
-0.7%
