Key Points:

• EUR/USD fell 0.2% to $1.1344, confined within a $1.13–$1.14 range.
• Traders are awaiting Eurozone April inflation and Q1 GDP data.
• ECB’s inflation survey could ease price pressure concerns.
• Big tech earnings (Amazon, Microsoft, Apple, Meta) could sway U.S. equities and dollar correlation.
• U.S. equities and the dollar continue to move together, tightening FX market conditions.

The euro stayed pinned within tight boundaries on Monday, as currency traders braced for a busy macro and earnings week. EUR/USD slipped to $1.1344, continuing to hover around key technical levels without strong directional bias.

ING’s Chris Turner noted that the European Central Bank’s inflation expectation survey, due Tuesday, could hint at cooling price pressures. However, Friday’s core inflation print for April may show a fresh uptick, complicating the monetary policy outlook.

Adding to the cautious tone, eurozone first-quarter GDP numbers are expected on Wednesday, offering a critical gauge of the bloc’s economic resilience amid global uncertainty.

Beyond European data, U.S. corporate earnings will dominate headlines. Heavyweights like Amazon, Microsoft, Apple, and Meta are all due to report, and any sharp moves in equities could spill over into FX markets.

Turner highlighted that U.S. equities and the dollar have traded with a positive correlation recently, meaning strong tech earnings could ironically boost the greenback, even at the euro’s expense.

Technical Analysis

EURUSD continues to drift within a tight range, with price action capped between 1.13808 and 1.13156 over the past sessions. The pair is currently trading near 1.13436, after a sharp drop toward the lower end of the range. MACD momentum is slipping into bearish territory, and the moving averages (5, 10, 30) are beginning to slope downwards, indicating building downside pressure.

Picture: EURUSD struggles to hold ground as downside pressure builds, with sellers testing key range support, as seen on the VT Markets app

Despite several attempts to break higher, sellers remain active around the 1.1380 mark. The failure to hold gains and the steady compression around the mid-point of the range suggest that a breakout may soon emerge. If the 1.1315 support fails, further downside toward 1.1290 could materialize quickly.

Short-term bias is neutral to bearish unless buyers reclaim 1.1360 with strong momentum.

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