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• EUR/USD inched back toward the 1.1200 handle amid general USD weakness on Tuesday.
• Market sentiment is climbing in the face of possible trade deals that will push the Trump administration away from its own tariff policies.
• EU GDP growth, US PPI and UoM Consumer Sentiment are the week’s key remaining datapoints.

EUR/USD rose on Tuesday, clawing back most of the week’s starting losses. The pair is now testing back into the 1.1200 handle, thanks to a general broad-market weakening in the Greenback than any particular bullish momentum bootstrapping Euro market flows.

Market response to the US Consumer Price Index (CPI) inflation was largely subdued on Tuesday. Investors remain optimistic that ongoing trade deal negotiations between the Trump administration and various parties will sustain positive sentiment, although all trade tariff concessions offered by the Trump team have been strictly temporary.

In the US, CPI inflation reduced slightly in April, reaching a new three-year low for annualized headline inflation. Nonetheless, the Trump administration’s approach of enforcing triple-digit tariffs on key trading partners is anticipated to have repercussions starting in May, leading market experts to expect this will be the last strong CPI report for some time.

German Harmonized Index of Consumer Prices (HICP) are due during Wednesday’s European market session, but the non-preliminary figures are unlikely to generate much interest. Pan-European Gross Domestic Product (GDP) figures for the first quarter are also due on Thursday, but median market forecasts are expecting the figures to print similar to the previous quarter.

On the US side, inflation figures for the US Producer Price Index (PPI) and the latest Consumer Sentiment Survey from the University of Michigan are scheduled for release in the latter part of the trading week. The US PPI inflation data will be published on Thursday, followed by important consumer sentiment figures on Friday.

EUR/USD price forecast
 

Markets pushed hard to muscle EUR/USD back over the 1.1200 handle on Tuesday, falling just shy of the key technical level. However, despite limited upside, the Fiber is back above the 50-day Exponential Moving Average (EMA) near 1.1070. Bullish momentum remains absent from the daily candlesticks, but technical oscillators are rolling over sharply from oversold territory, hinting at the potential for a bullish extension.

EUR/USD daily chart
 

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