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14 May 2025,09:34

Daily Market Analysis

Euro Holds Steady Amid Mixed Signals from Economic Data and Trade Tensions

14 May 2025, 09:34

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Key Takeaways:

*Recent upbeat economic indicators buoyed the euro. 

*pay attention to the Eurozone-U.S. trade tension.  

Market Summary:

The euro is trading with relative stability following a string of upbeat economic data from the Eurozone, fueling expectations that the European Central Bank may adopt a more hawkish monetary stance in the coming months. Both CPI and PMI figures have reinforced this view, with inflation hovering near the 2% target and purchasing managers’ indices holding above the 50 mark, suggesting continued economic expansion.

However, the euro remains under scrutiny as the bloc lags behind the UK and Switzerland in engaging the U.S. on trade negotiations. Tensions escalated after President Trump’s administration imposed sweeping tariffs, prompting EU officials to adopt a firmer tone, signaling potential countermeasures rather than conceding to what they deem an unfair deal. This growing friction has heightened market uncertainty, applying downward pressure on the single currency.

Traders are now eyeing today’s inflation data from Germany and Spain, which could provide further directional cues for the euro in the near term.

Technical Analysis:

EUR/NZD, H4

The euro has continued to weaken against the New Zealand dollar after the pair was rejected at the psychological resistance level of 2.0000. Since then, EUR/NZD has been trading in a lower-high pattern and is now testing critical support near the 1.8790 mark. A decisive break below this level could confirm a strong bearish signal and open the door for a new monthly low.

Momentum indicators reinforce the bearish outlook. The RSI remains subdued below the 50 threshold, while the MACD struggles to break above the zero line and is now tilting lower—suggesting that downward pressure is intensifying.

Unless bulls can reclaim ground above key resistance, the path of least resistance remains to the downside.

Resistance levels: 1.9220, 1.9500

Support levels: 1.8460, 1.8090

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