EUR/USD finds resistance ahead of 1.0900, returns to 1.0850 region
- ZEW Economic Sentiment for eurozone rises sharply in April.
- US Dollar Index looks to close above 100 on Tuesday.
- ECB's Knot says monetary policy will continue to play important role during recovery.
The EUR/USD pair spent the first half of the day fluctuating in a relatively tight range below the 1.0850 handle despite the upbeat ZEW Survey readings. With the USD coming under modest bearish pressure during the American trading hours, the pair rose toward the 1.0900 but struggled to preserve its momentum. As of writing, the pair was down 0.15% on the day at 1.0845.
Earlier today, the ZEW Economic Sentiment Index for the eurozone jumped to 25.2 in April from -49.5. However, the ZEW Current Situation Index for Germany plunged to a record low of -91.5 and missed the market expectation of -77.5 by a wide margin to make it difficult for the shared currency to capitalize on the data.
Meanwhile, European Central Bank (ECB) Governing Council member Klaas Knot said on Tuesday that the monetary policy is likely to continue to play an important role in the recovery phase. "Central banks within their mandates stand ready to play their part in mitigating the adverse economic consequences of this global crisis," Knot added.
DXY builds on Monday's gains
On the other hand, the dismal market mood as reflected by sharp falls witnessed in global equity indexes and the US Treasury bond yields on Tuesday is helping the USD outperform its peers. The US Dollar Index (DXY), which tested the 100.50 handle earlier in the day, was last seen up 0.4% on the day at 100.34.
On Wednesday, the European Commission will release the preliminary Consumer Confidence Index data for April. The US economic docket won't be featuring any significant macroeconomic data releases and risk-perception is likely to continue to impact the USD's valuation.
Technical levels to watch for