Eurusd declines as U.S. new-home sales rise while Euro Area consumer confidence falls

EURUSD Analysis

Performance after Wednesday
Period	Pct	Chg	Momentum
Wednesday	-0.34%	-38.7 Pips
Week to-date	-0.48%	-54.3 Pips
April	4.79%	518.6 Pips

Upcoming key events (London Time)

No major events for the day.

What happened lately

The United States witnessed a significant increase in new-home sales, registering a rise of 7.4% in March as compared to a modest 1.8% increase in February. This indicates a robust growth in the housing market, suggesting improved economic conditions and consumer confidence in the housing sector. Such a rise could potentially drive increased investments in real estate and related industries, contributing positively to the U.S. economic landscape. The sustained growth in new-home sales reflects an underlying strength in the housing market which may influence broader economic growth.

Conversely, the Euro Area experienced a decline in consumer confidence as illustrated by the April flash estimate of the Euro Area Consumer Confidence Indicator, which dropped to -16.7 points from the -14.5 points recorded in March. This decline signifies growing pessimism among European consumers likely driven by uncertainties in the economic environment across the Eurozone. The decrease in consumer confidence can impact spending and investment behavior, which will have broader implications for economic growth and stability in the Euro Area.

Regarding the EURUSD exchange rate, the contrasting economic data between the U.S. and the Euro Area can exert downward pressure on the EUR/USD pair. The robust growth in U.S. new-home sales suggests a healthier U.S. economy in comparison to the weakening consumer confidence in the Euro Area. These differing economic conditions can result in an appreciation of the U.S. dollar relative to the Euro. The drop of -0.34% in EURUSD to 1.13236 aligns with this analysis, as investors and traders respond to the stronger U.S. economic indicators alongside the weaker sentiment from Europe. As a result, the EURUSD exchange may continue to experience pressure unless there is a shift in economic dynamics or policy interventions that could alter investor sentiment.

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What can we expect from EURUSD today?

EURUSD on Wednesday dropped -0.34% to 1.13236. Price is above 9-Day EMA while Stochastic is falling.

Updated daily direction for EURUSD looks bearish as the pair posted lower in Wednesday trading session.

Looking ahead for the day, immediate support level is at S1 1.12739 with break below could see further selling pressure towards S2 at 1.12241. To the upside, with the current momentum bearish, we prefer to look at breakout of the recent daily high of 1.14400 as a potential indicator of buying interest. Failure to break the resistance level would continue to echo bearish sentiment. A close below 1.13072 would indicate selling pressure.

For the week to-date, take note that EURUSD is mixed as compared to the prior week.

Key levels to watch out:

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