Eurusd rises amid improving Eurozone sentiment and market consolidation

EURUSD Analysis

Performance after Monday
Period	Pct	Chg	Momentum
Monday	0.17%	19.1 Pips
Week to-date	0.13%	14.8 Pips
May	-0.14%	-15.3 Pips

Upcoming key events (London Time)

Wed 07:00 PM USD Fed Interest Rate Decision (Federal Funds Rate)

What happened lately

In the Eurozone, the sentix Economic Index for May shows a significant improvement, increasing to -8.1 points from -19.5 points in the previous month. This positive shift suggests improving sentiment among investors and analysts regarding the economic outlook in the Euro Area. The enhanced perception could be attributed to factors such as stabilization in specific economic sectors, strategic policy measures by the European Central Bank, or a more optimistic view of future economic policies. The improvement indicates that confidence is slowly rebuilding, which could help support further economic recovery efforts throughout the region.

Regarding the EURUSD currency pair, the Euro appreciated by 0.17% against the US Dollar, reaching a value of 1.13143. This rise suggests a slight strengthening of the Euro, potentially influenced by the improved economic sentiment reflected in the sentix Economic Index. However, the market remains in a state of consolidation, indicating that traders are uncertain about the future direction. This state of consolidation is common in Forex markets when participants are waiting for more decisive economic data or events that could influence currency movements significantly.

A critical upcoming event that could influence the EURUSD pair is the US Federal Reserve’s interest rate decision scheduled for Wednesday at 07:00 PM. Being a high-impact event, the decision has the potential to create volatility in the markets. An unexpected rate change or a hawkish/dovish stance may cause significant fluctuations in currency exchange rates. If the Federal Reserve indicates increased optimism about the US economy and moves to raise interest rates, the US Dollar might strengthen, putting downward pressure on the EURUSD pair. Conversely, if the Federal Reserve maintains current rates or signals a cautious outlook, the Euro could continue to gain ground against the US Dollar. Traders and investors will be closely monitoring this event to adjust their expectations and strategies in light of any policy shifts.

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What can we expect from EURUSD today?

EURUSD on Monday rose 0.17% to 1.13143. Price is below 9-Day EMA while Stochastic is rising.

Updated daily direction for EURUSD looks mixed as the pair is likely to consolidate above 1.12858 (S1).

Looking ahead today, to see upside interest, we prefer to look at price breakout of last daily high of 1.13648 or trades above daily pivot 1.13253. Break above could target R1 at 1.13538. While to the downside, we are looking at 1.12858 (S1) and daily low of 1.12968 as support levels. EURUSD need to break on either side to indicate a short-term bias. A break above 1.13648 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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