The euro fell to 1.1765 against the US dollar ahead of Tuesday\u2019s US session, after failing near 1.1790 on Monday. Markets reacted to weaker ZEW survey results, while attention shifted to Kevin Warsh\u2019s Federal Reserve confirmation hearing and US-Iran talks.<\/p>\n
ZEW reported German economic sentiment at -17.2 in April, the lowest since December 2022, versus a -5 forecast and -0.5 in March. The assessment of the current situation dropped to -73.7 from -62.9.<\/p>\n
Eurozone economic sentiment fell to -20.4, also the weakest since December 2022. Expectations had been for -3.6, after -8.5 previously.<\/p>\n
The Wall Street Journal said Tehran told regional mediators it was willing to send a delegation to Pakistan, after earlier threats to leave the peace process following a US seizure of an Iranian cargo vessel. Reuters cited an anonymous US source saying \u201cthings are moving forward\u201d.<\/p>\n
In the US, Fed chair nominee Kevin Warsh faces a Senate confirmation hearing on Tuesday. Topics are expected to include Fed independence and its financial portfolio.<\/p>\n
EUR\/USD remained above late-March lows but stalled near 1.1800, with RSI around 50 and MACD slightly negative. Resistance sits near 1.1790 and 1.1850, with support at 1.1730, 1.1705, and 1.1645\u20131.1675.<\/p>\n
The recent slump in Eurozone economic sentiment, particularly the ZEW survey’s drop to its lowest since December 2022, confirms our view that the euro’s momentum is fading. With EUR\/USD struggling below the 1.1800 level, the path of least resistance appears to be shifting downwards. This weak European data is a significant headwind for the currency.<\/p>\n
This pessimism is not isolated, as Eurostat’s latest flash estimate showed core inflation dipping to 2.5%, reducing pressure on the European Central Bank to remain hawkish. Furthermore, recent data from Destatis showed German industrial production unexpectedly contracted by 0.5% last month. This combination of slowing inflation and weak output makes it hard to justify buying euros here.<\/p>\n
In contrast, the focus on Kevin Warsh as a potentially hawkish Fed Chair nominee supports a stronger dollar, especially with the latest US CPI report showing core inflation remaining sticky at 3.1% year-over-year. We saw a similar dynamic during the 2022-2023 tightening cycle, where persistent US inflation data consistently strengthened the dollar against its peers. The policy divergence between a cautious ECB and a vigilant Fed is becoming increasingly clear.<\/p>\n
While progress in the US-Iran peace talks adds a layer of complexity, it ultimately removes a tail risk that could have fueled a flight to traditional safe havens like the Swiss franc or gold. This de-escalation allows fundamental economic drivers, which currently favor the US dollar, to reassert themselves. The market can now focus more on interest rate differentials.<\/p>\n
Given the weakening technicals and fundamental backdrop, we should consider positioning for a break below the 1.1705 trendline support. The options market reflects this growing bearish sentiment, with one-month risk reversals for EUR\/USD recently trading at -0.4 in favor of puts. Purchasing EUR\/USD put options with a strike price around 1.1650 would offer a defined-risk way to profit from a potential slide towards that key support cluster.<\/p>\n","protected":false},"excerpt":{"rendered":"
Euro slips to 1.1765 after weak ZEW sentiment; focus shifts to Warsh hearing and US-Iran talks.<\/p>\n","protected":false},"author":38,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[46],"tags":[],"class_list":["post-45495","post","type-post","status-publish","format-standard","hentry","category-live-updates"],"acf":[],"aioseo_notices":[],"featured_image_src":null,"featured_image_src_square":null,"author_info":{"display_name":"josephine","author_link":"https:\/\/www.vtmarketsglobal.com\/en\/author\/josephine\/"},"_links":{"self":[{"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/posts\/45495","targetHints":{"allow":["GET","POST","PUT","PATCH","DELETE"]}}],"collection":[{"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/users\/38"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/comments?post=45495"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/posts\/45495\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/media?parent=45495"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/categories?post=45495"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/tags?post=45495"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}