Eur/usd rises amid contrasting economic data from the US and Germany

EURUSD Analysis

Performance after Thursday
Period	Pct	Chg	Momentum
Thursday	0.55%	62.1 Pips
Week to-date	-0.09%	-10.3 Pips
April	5.2%	562.6 Pips

Upcoming key events (London Time)

No major events for the day.

What happened lately

In the United States, the most recent economic data reveals several shifts in its labor and manufacturing sectors. Initial Unemployment Insurance Claims saw a slight increase to 222,000, indicating a marginal uptick in unemployment claims. The manufacturing sector presented mixed results: Nondefense Capital Goods Orders, excluding Aircraft, edged up to 0.1% in March, indicating stability in investment. However, Durable Goods Orders ex-Transportation remained flat at 0%, while the broader category of Durable Goods – New Orders surged by 9.2% in March, a significant increase from February’s 1%. Similarly, Durable Goods Orders excluding Defense saw a substantial rise to 10.4% from 0.8%. Additionally, the U.S. housing market showed strength with new-home sales soaring by 7.4% in March, a significant jump from 1.8% in February.

In contrast, Germany’s economic indicators painted a more subdued picture. The ifo Expectations Index slightly declined to 87.4 points in April from the previous month’s 87.7, hinting at diminishing business confidence regarding future economic conditions. Nonetheless, the ifo Business Climate Index experienced a minor increase to 86.9 points from 86.7, while the ifo Current Assessment rose to 86.4 points from 85.7, suggesting a moderate improvement in current business conditions despite future uncertainties.

These developments have implications for the EURUSD currency pair. The robust performance in the U.S. durable goods sector and strong new-home sales figures signify potential economic expansion in the U.S., which could bolster the USD. Meanwhile, the mixed outlook from Germany’s ifo indices might weigh on the Euro, presenting a divergence in economic momentum between the U.S. and Europe. Despite the reported 0.55% increase in the EURUSD rate on Thursday, any sustained economic strength in the U.S. compared to Europe could lead to a stronger USD in the medium term, exerting downward pressure on the EURUSD pair if the observed trends continue. The lack of major upcoming events means speculative moves might also affect short-term price action, keeping the pair in consolidation.

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What can we expect from EURUSD today?

EURUSD on Thursday rose 0.55% to 1.13857. Price is above 9-Day EMA while Stochastic is falling.

Updated daily direction for EURUSD looks mixed as the pair is likely to consolidate above 1.13374 (S1).

Looking ahead today, to see upside interest, we prefer to look at price breakout of last daily high of 1.13980 or trades above daily pivot 1.13677. Break above could target R1 at 1.1416. While to the downside, we are looking at 1.13374 (S1) and daily low of 1.13194 as support levels. EURUSD need to break on either side to indicate a short-term bias. A break above 1.13980 may suggest continuation after recent positive movement.

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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