The Euro (EUR) extended its losses against the US Dollar (USD) for the second consecutive day, trading below 1.1700 after being rejected at 1.1790 on Tuesday [1]. This decline was driven by disappointing Eurozone economic data, with the second estimate of GDP confirming a sluggish 0.1% quarter-on-quarter growth in the first three months of the year and 0.8% year-on-year, both lower than the previous quarter's 0.2% and 1.2%, respectively [1]. Industrial Production figures also missed expectations, rising only 0.2% in March compared to the 0.3% forecast, and February's growth was revised down to 0.2% from 0.4%. Year-on-year, factory output contracted by -2.1% in March, accelerating from -0.8% in February [1].
Meanwhile, the US Dollar remained strong, buoyed by an inflationary surprise in April's Consumer Price Index (CPI) figures, which reached a nearly three-year high year-on-year. This has diminished hopes for further Federal Reserve rate cuts in the near future, supporting US Treasury yields and the Greenback [1]. Additionally, geopolitical tensions in the Middle East and US President Donald Trump's diplomatic efforts in China have contributed to the USD's safe-haven appeal [1].
Technical analysis indicates a growing bearish tone for EUR/USD, with momentum indicators such as the Relative Strength Index (RSI) near oversold territory at 33 and the MACD histogram deepening in negative territory, suggesting persistent selling pressure [1]. Bears have gained momentum after breaching weekly lows near 1.1720 and are targeting a key support area between 1.1645 and 1.1675, which previously contained downside attempts in April. A break below these levels could bring April's bottom near 1.1510 into focus [1]. Resistance is expected near intra-day highs at 1.1740 and previous highs above 1.1790 and 1.1851 [1].
CONCLUSION
Disappointing Eurozone GDP and industrial production data have intensified bearish sentiment for the Euro, pushing EUR/USD below 1.1700. Strong US inflation and geopolitical tensions are further supporting the Dollar, with technical indicators pointing to continued downside risk. Market participants are closely watching key support levels for potential further declines.