Daily Price Outlook
The EUR/USD is trading at 1.0974, up by 0.03% in 24 hours. After a two-day slump, the currency pair gathered momentum and recovered due to a rebound in risk sentiment.
Global Economic Recovery
China's post-COVID revival shows up to be on the right path, with data released on Tuesday showing that the world's second-largest economy expanded 4.5% year on year in the first quarter. The data beat forecasts of 4% growth and recorded an impressive rise from the previous quarter's 2.9% reading.
Furthermore, retail sales increased by more than 10%, reaching a level not seen in almost two years, supporting expectations that the country's post-pandemic recovery continues to be on track.
The safe-haven dollar has suffered as confidence about the global economic recovery has increased. The price of the Dollar Index (DXY) is 101.77. The US dollar lost some of its gains from the previous day as risk sentiment increased in response to positive Chinese GDP figures. Following positive China statistics, the dollar declined and the EUR/USD pair increases.
Eurozone Final CPI Eyed
The most recent German ZEW economic sentiment report, issued on Tuesday, shows that confidence started to decline in April. The measure of economic sentiment decreased to 4.1, falling short of estimates of 15.3 and the previous month's reading of 13.
Unexpectedly, investor motivation in Germany declined, indicating that the economy would remain unchanged in the months ahead, although with only a minor negative impact on the Euro.
However, significantly higher-than-anticipated Chinese retail sales and GDP strengthened confidence in economic development, luring investors into riskier assets like the EUR/USD.
Later this morning, the final March inflation data for the eurozone is set to be released. Investors likely anticipate a similar move following lower inflation data from France, Germany, and Italy.
However, the core inflation figures ought to be more significant. Increased core inflation numbers would support a 50 basis point ECB interest rate increase in May and push the odds of monetary policy divergence in favor of the Euro.
Daily Technical Levels:
Pivot Point: 1.0959
EUR/USD – Technical Outlook
The EURUSD pair concluded yesterday above the 1.0945 level, putting a halt to the bearish correction and steering towards the resumption of the primary bullish trend. It now aims to achieve positive targets, beginning with testing the recently recorded high at 1.1075.
As a result, we anticipate further growth in the upcoming sessions, bolstered by the EMA50 that supports the price from below. It is important to note that if the 1.0945 level is broken, it will invalidate the positive scenario and prompt the price to revert to the corrective bearish trajectory.
Today's expected trading range is between 1.0900 (support) and 1.1065 (resistance).
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