Despite strong signals from the German IFO survey and unexpectedly high preliminary Services PMI data across the Eurozone, the EUR/USD pair has struggled to maintain its upward trajectory, recently turning bearish around the 1.0688 level, with an intraday low of 1.0680.

The dip in the EUR/USD price can be largely attributed to the strength of the US dollar, coupled with a dovish tone from some ECB policymakers who have indicated a potential cut in the base lending rate come June.

These factors suggest an easing monetary stance which traditionally could dampen the Euro’s strength.

Conflicting Signals from ECB Officials Impact Euro Dynamics

While the broader ECB stance appears dovish, contrasting views from key ECB figures like Joachim Nagel, who advocates for a cautious approach to rate cuts due to high services inflation and wage growth, introduce complexity to the forecast for the Euro.

Such hawkish perspectives support the Euro by hinting at the possibility of sustained or higher interest rates, which could enhance the currency’s attractiveness to investors, potentially stabilizing or boosting the EUR/USD price.

Comprehensive View from Technical Analysis on EUR/USD

Today, the EUR/USD pair recorded a marginal increase, up by 0.01%, with a trading price of $1.07025. The currency pair is nearing its pivot point at $1.0711, which is expected to act as a key indicator for short-term price direction.

Resistance levels are observed at $1.0744, $1.0778, and $1.0809, which need to be surpassed to confirm a bullish continuation. Conversely, support levels are established at $1.0670, with more robust support at $1.0635 and $1.0603, providing potential entry points for buyers to curb further declines.

The Relative Strength Index (RSI) at 63 indicates a moderate bullish sentiment but is nearing the overbought zone, which could limit the upside potential.

The 50-day Exponential Moving Average (EMA) is positioned at $1.0654, slightly below the current price, suggesting a cushion against downward movements. A doji candlestick pattern near the $1.0711 resistance hints at possible market hesitation or reversal, signalling traders to proceed with caution.

Given the current market conditions, a prudent strategy would involve setting a buy limit order at $1.06799, targeting a take-profit at $1.07440, with a stop loss at $1.06358 to effectively manage risks.