The EUR/USD pair has rebounded from the 1.1600 level, climbing to 1.1630, effectively reversing the losses observed on Tuesday. A ceasefire between Israel and Lebanon has impacted the safe-haven US Dollar on Thursday. Retail sales in the Eurozone experienced a decline that exceeded expectations in April. The Euro is rallying against a weaker US Dollar in Thursday’s European trading session, reversing Wednesday’s losses and returning to the 1.3630 area at the time of writing. A moderate improvement in market sentiment following news of a ceasefire in Lebanon has mitigated the impact of the weak Eurozone Retail Sales report released earlier in the day.
The safe-haven US Dollar is encountering difficulties on Thursday, in light of reports indicating an agreement between Israel and Lebanon to enact a ceasefire, which awaits confirmation from Hezbollah. This agreement is regarded as the initial move to unravel the impasse in Iran and progress towards a sustainable peace in the region. A moderate market optimism is exerting pressure on the safe-haven US Dollar while supporting the Euro, which remains unaffected by a 0.4% decline in Eurozone Retail Sales for April. The final data exceeds market expectations of a 0.3% decline, while the upward revision of March’s figures – to a 0.8% increase from the previously estimated 0.1% drop – has helped mitigate the adverse effects on the common currency.
The broader technical picture, however, remains largely unchanged. The EUR/USD is currently positioned at 1.1631, maintaining a largely neutral posture as price movements remain confined within the trading range established over the past two and a half weeks, specifically between 1.1570 and 1.1660. Technical indicators in 4-hour charts present a mixed picture, supporting a neutral perspective. The Relative Strength Index is positioned just above the 50 midline, whereas the Moving Average Convergence Divergence continues to register a slight negative value.
Efforts to push higher are expected to encounter considerable resistance around the 1.1660 level, which has been limiting bullish movements since mid-May. Above that level, the subsequent targets are the high from May 14, at 1.1720, and the peak from May, in the vicinity of 1.1790. On the downside, the 1.1600 round level has effectively restrained bearish movements this week, serving as a barrier to the descent towards the range bottom, located at the 1.1570 level (May 21 low). A confirmation below this level would position April’s bottom within the range of 1.1505-1.1525, drawing the attention of bearish sentiment.