German GfK Data Miss & ASML Rally Drive Markets: EUR/USD and EURO STOXX 50 Outlook

Market Overview

The euro remains stable despite weaker German GfK Consumer Climate data, which fell to -22.4, missing forecasts of -20.5. However, Spanish Flash GDP met expectations at 0.8%, offering some economic resilience. Meanwhile, M3 Money Supply slowed to 3.5%, signaling weaker liquidity, while Private Loans rose to 1.1%, reflecting modest credit growth.

Traders now await the German 10-year bond auction results, which could influence eurozone yields and the euro’s next move.

EUR/USD Technical Analysis

EUR/USD is trading at $1.04129, down 0.16%, as buyers defend key support near $1.03841. The pair remains within a tight range, consolidating between $1.03841 and $1.04934, with traders awaiting a catalyst for the next move.

Technically, the 50-day EMA at $1.04368 is acting as immediate resistance, while the 200-day EMA at $1.03901 reinforces a key support zone. A bullish trendline, stretching from recent lows, suggests the pair could gain momentum if it holds above $1.04446.

A sustained break above this pivot could push EUR/USD toward $1.04934, while a drop below $1.03841 may accelerate selling toward $1.03391. For now, EUR/USD remains in limbo—watch for a breakout.

EURO STOXX 50 Fundamental Analysis

European equities surged to record highs on Wednesday, with the EURO STOXX 50 gaining momentum, led by a sharp rally in technology stocks. ASML jumped 11.2% after reporting €7.09 billion in fourth-quarter bookings, easing concerns over AI chip demand.

Other semiconductor stocks, including STMicroelectronics and BE Semiconductor, followed suit, boosting the sector 4.5%, marking its best single-day gain in a year.

Industrial stocks also rallied, with Volvo rising 7% on strong orders, lifting the broader sector 1.3%. However, luxury stocks weighed on the index, as LVMH, Kering, and Dior slid after underwhelming sales data.

Meanwhile, expectations for a 25-bps ECB rate cut on Thursday and Fed policy stability remain key drivers for market sentiment. Traders will watch economic data and monetary signals for further direction.

EURO STOXX 50 Technical Analysis

EURO STOXX 50 is climbing, up 0.40% at 5227.5, as buyers push the index toward a key pivot at 5235. A bullish engulfing candle on the 4-hour chart signals strong buying interest, reinforcing the broader uptrend within an ascending channel. The 50-day EMA at 5212 is providing immediate support, while the 200-day EMA at 5118 marks a deeper cushion for bulls.

A sustained move above 5235 could fuel momentum toward 5293, with an extended target at 5335 if buying pressure persists. However, failure to hold above 5235 could invite sellers, with 5187 as the next downside level to watch.