ECB Speeches and Ifo Data to Drive Market Sentiment: EUR/USD and EURO STOXX 50 Outlook

Market Overview

The euro strengthened after better-than-expected manufacturing data from France and Germany. French Manufacturing PMI rose to 45.3, exceeding the forecast of 42.4, while Germany’s PMI improved to 44.1, surpassing expectations. The services sector also showed resilience, with German Services PMI reaching 52.5.

Investors now focus on upcoming speeches from ECB President Lagarde and Germany’s Ifo Business Climate data, which could provide further insights into the eurozone’s economic outlook.

The euro remains sensitive to inflation trends and policy signals from the European Central Bank.

EUR/USD Technical Analysis

EUR/USD is trading at $1.04872, showing a modest uptick of 0.05%, as the pair navigates key technical levels. The pivot point at $1.04538 serves as a critical support level, with a sustained move above it signaling potential bullish momentum. Immediate resistance stands at $1.05201, followed by a stronger barrier at $1.05854.

On the downside, support is found at $1.03841 and $1.03391, which could come into play if sellers regain control. The 50-day EMA at $1.04302 offers short-term support, while the 200-day EMA at $1.03750 reinforces a broader trend. Traders are closely watching these levels for directional cues, with a break below pivot levels potentially triggering further downside pressure.

EURO STOXX 50 Fundamental Analysis

European stocks declined on Monday as the technology sector faced pressure after China’s release of a low-cost AI model raised concerns over competition and profit margins. The EURO STOXX 50 dropped 1.3%, tracking global market losses, with tech firms like ASML and ASM International falling 11.5% and 15%, respectively.

Market sentiment remains cautious ahead of major U.S. tech earnings and upcoming interest rate decisions by the Fed and ECB.

Additionally, U.S. trade policy uncertainties further dampen risk appetite. German business morale showed unexpected improvement, while Ryanair posted stronger-than-expected earnings, rising 4.8%. Investors are closely monitoring inflation data and GDP reports for further market direction.

EURO STOXX 50 Technical Analysis

The EUR STOXX index is currently trading at 5,142, down 1.32%, reflecting bearish sentiment as it hovers near key support. The pivot point at 5,183 serves as a critical threshold; a sustained move above this level could signal bullish momentum toward immediate resistance at 5,222, with a further target at 5,278.

However, if the index remains below the pivot, downward pressure may intensify, with support at 5,142 and a deeper decline potentially testing 5,101.

The 50-day EMA at 5,201 presents a resistance challenge, while the 200-day EMA at 5,094 offers a cushion. Traders should watch for a breakout above 5,183 to confirm bullish strength.