Markets remain on edge as high-impact economic data and geopolitical developments unfold. With U.S. jobless claims, UK retail figures, and Canadian consumer spending data on tap, investors are closely watching for signals on labor market resilience and household demand. At the same time, EURUSD’s uptrend has paused over the past two sessions amid growing concerns over eurozone growth stagnation and renewed trade tensions. While the broader trend remains bullish, signs of exhaustion are beginning to surface, raising the possibility of a short-term consolidation before the next directional move. Eurozone growth has stalled, burdened by US tariffs and political friction, while shifting rhetoric from President Trump on trade and Fed policy injects fresh volatility into global markets. As uncertainty deepens, this week’s data could prove pivotal in setting near-term direction.
Since reaching a low of 1.01768 on January 13, EURUSD has climbed more than 10%, supported by a blend of technical and fundamental factors.
The initial shift was signaled by a failure swing pattern, suggesting a notable change in market dynamics. Notably, the higher low at 1.02760, followed by a breakout above 1.04418, established a bullish price structure, laying the groundwork for a sustained upward trend.
The rally gained traction as the pair moved decisively above the 20- and 50-period Exponential Moving Averages, triggering a classic “Golden Cross” — a technical pattern often associated with continued upward momentum.
Momentum indicators also paint a bullish picture. The Momentum Oscillator has remained firmly above the 100 level, indicating strong upward pressure, while the Relative Strength Index (RSI) has consistently held above the neutral 50 mark, underscoring ongoing buyer interest.
That said, the emergence of a negative divergence between price action and the Momentum Oscillator—combined with the RSI retreating from overbought levels—suggests that bullish momentum may be fading. This setup warrants caution, as it raises the likelihood of a short-term pullback or consolidation phase before the broader trend resumes.
Key Resistance Levels
Should the bulls maintain market control, traders may direct their attention toward the four potential resistance levels below:
1.15724: The initial resistance level is set at 1.15724, which mirrors the daily high marked April 21.
1.16748: The second resistance level is set at 1.16748, which mirrors the 423.6% Fibonacci Extension drawn from 1.09538 to 1.07310.
1.18436: The third price target is identified at 1.18436.
1.20086: An additional price target has been established at 1.20086, mirroring the 423.6% Fibonacci Extension drawn from 1.11446 to 1.08776.
Key Support Levels
Should the sellers take market control, traders may consider the four potential support levels listed below:
1.11446: The initial support level is seen at 1.11446, corresponding to the daily high formed on April 3.
1.09538: The second support level is estimated at 1.09538, representing the high point marked on March 18.
1.07310: The third support level is identified at 1.07310, reflecting the trough from March 27.
1.05279: An additional downside target is 1.05279, mirroring the peak from February 26.
Fundamentals
Economic momentum in the eurozone stalled in April, with fresh data showing stagnation across the bloc amid rising trade tensions and policy uncertainty. The composite PMI fell to 50.1—just above the contraction threshold—as both Germany and France saw activity shrink. Germany slipped into contraction for the first time in four months, while France recorded its eighth straight monthly decline.
Analysts attribute the downturn to US tariffs under President Trump and fragile political dynamics, particularly in France. While falling oil prices and increased defense spending may offer some support, the outlook remains subdued. The IMF downgraded eurozone growth forecasts, citing the broader shift toward global protectionism.
On the other hand, President Donald Trump signaled potential flexibility on tariffs, saying the US is in daily contact with China and “actively” working toward trade deals. While he warned that tariffs could be finalized in the next few weeks if talks stall, he also assured reporters he wouldn’t fire Fed Chair Jerome Powell—a shift that helped lift US stocks by the close of April 23.
However, uncertainty remains high. Trump suggested higher tariffs on Canadian cars and was vague about deals with countries like India. Meanwhile, China halted Boeing deliveries in response to trade tensions, and a dozen US states filed a lawsuit challenging the tariffs’ legality. The IMF downgraded global growth forecasts, citing Trump’s trade moves.
Conclusion
In conclusion, markets are navigating a complex landscape shaped by conflicting signals and heightened geopolitical risk. While EURUSD remains technically supported, the recent pause highlights growing fragility in sentiment as economic and policy headwinds gather. Key data releases in the coming days will be critical in clarifying whether current trends can extend or whether a broader realignment is underway. For now, caution prevails as investors await confirmation from both the charts and the headlines.
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