The Euro appreciates against the US Dollar for the second consecutive day on Thursday, trading at 1.1765 at the time of writing, fuelled by hopes of a peace deal that would end Iran’s war and upbeat Eurozone macroeconomic releases. Data released on Thursday indicated that Eurozone Retail Sales experienced a slight decline of 0.1% in March, outperforming the market consensus which anticipated a 0.3% decrease, amidst the repercussions of the energy shock resulting from the blockade of the Strait of Hormuz. The latest figures indicate a downwardly revised decline of 0.3% in February. Sales increased by 1.2% year-on-year, surpassing the anticipated 1% rise and following a 1.3% growth recorded in February.
Earlier today, Destatis published the German Factory orders data, which surpassed expectations, showing a 5% growth in March, significantly higher than the 1% anticipated by market analysts and an acceleration from the 1.4% increase recorded in February. The Euro is gaining support from declining oil prices, coinciding with reports of advancements in the peace talks between the US and Iran. Recent reports indicate that Tehran is evaluating a peace plan proposed by the US, while Al Hadath, affiliated with Al Arabiya, shared on X that discussions regarding the gradual reopening of the Strait of Hormuz are progressing, positively influencing investor sentiment.
EUR/USD exhibits a positive near-term outlook, although price movements remain restricted beneath the upper boundary of the trading channel observed over the past three weeks, specifically within the range of 1.1790 to the 1.1800 psychological threshold. The momentum dynamics indicate a bullish sentiment, as the 4-hour Relative Strength Index remains close to 65, reflecting strong buying interest, while the Moving Average Convergence Divergence histogram displays expanding green bars.
Bulls, however, are likely to face challenges at the noted resistance below 1.1800, which obstructs the route towards April’s peak near 1.1850. On the downside, session lows are at 1.1745; however, the critical zone for bearish sentiment is situated between this level and 1.1775, which has previously constrained downward movements on multiple occasions in April.