EUR/USD retreats to daily lows near 1.1440

EUR/USD loses the grip and retreats to the 1.1440 zone as the Greenback’s rebound now gathers extra steam, particularly after some positive headlines pointing to mitigating trade concerns on the US-China front on Tuesday.

EUR/USD Technical Overview

The EUR/USD is correcting overbought conditions, but the case for higher highs is still in place. The daily chart shows technical indicators are easing from their recent peaks, but still developing in overbought territory, and with limited downward strength. At the same time, EUR/USD stands far above all its moving averages, with the 20 Simple Moving Average (SMA) maintaining its upward slope far above the longer ones. Bulls paused, but did not give up.

In the near term, and according to the 4-hour chart, the EUR/USD is poised to correct lower, although a steeper decline is still out of the picture. Technical indicators aim lower but hold above their midlines, reflecting the ongoing retracement rather than suggesting a steeper decline. A mildly bullish 20 SMA provides support at around 1.1440, while the 100 and 200 SMA maintain their upward slopes far below the shorter one.

Support levels: 1.1440 1.1405 1.1360

Resistance levels: 1.1510 1.1550 1.1595

Fundamental Overview

The EUR/USD pair pared its rally on Tuesday but retains most of its recent gains. The pair trades in the 1.1470 area early in the American session, with the US Dollar (USD) correcting oversold conditions but far from becoming attractive.

Market players are concerned about the latest United States (US) President Donald Trump's comments about Federal Reserve (Fed) Chairman Jerome Powell, casting doubt on the central bank’s independence. Trump criticised the Fed’s decision to keep interest rates on hold at high levels, and claimed the Fed is reacting “too late,” given that there is “virtually no inflation,” according to his own words, risking an economic slowdown.

Meanwhile, US tariffs on trading partners remain on hold, yet without signs of progress in negotiations, adding to investors’ uncertainty. As a result, stock markets remain on the back foot. Asian and European indexes trade mostly in the red after Wall Street plunged on Monday. US futures are stable, but a recovery seems out of the picture.

Data-wise, the macroeconomic calendar includes the preliminary estimate of the April Eurozone (EU) Consumer Confidence. The US will release the Richmond Fed Manufacturing Index. Additionally, several Fed and European Central Bank (ECB) officials will be on the wires and may comment on monetary policy.