The euro-dollar pair (EUR/USD) endured a volatile trading session on Thursday, briefly slipping below its 50-day Exponential Moving Average (EMA) and testing the key 1.1000 psychological level for the second time in a week. However, a late-session recovery helped the pair claw back earlier losses, with bids returning to the 1.1200 area by the end of the day.
The volatility came amid soft economic data from both sides of the Atlantic. In Europe, first-quarter GDP data showed a slight deceleration, with quarterly growth easing to 0.3%, down from prior readings. On an annualized basis, GDP remained steady at 1.2%, but the quarterly slowdown gave traders a reason to adopt a more cautious stance on the euro.
Across the Atlantic, April’s U.S. Producer Price Index (PPI) rose just 0.1% month-over-month, easing concerns that newly imposed tariffs have yet to filter through into broader price pressures. The softer-than-expected print provided some temporary relief for markets and helped stabilize risk sentiment.
Attention now shifts to Friday’s release of the University of Michigan’s Consumer Sentiment Index, which could provide fresh direction for the EUR/USD pair. The index has declined for four consecutive months, hitting a two-year low of 52.2. Market expectations point to a modest rebound to 53.4. A stronger-than-expected reading could reinforce confidence in U.S. economic resilience and offer support to the greenback.
EUR/USD Outlook: Bearish Drift Continues Despite Technical Support
Technically, EUR/USD remains under mild downward pressure despite Thursday’s rebound. The pair continues to show signs of a slow grind lower from its late April highs near the 1.1600 mark. While bullish momentum has thus far managed to hold the pair above key support levels, recent price action reflects growing hesitation among euro bulls.
Traders will be closely monitoring how the pair reacts around the 1.1000–1.1200 zone, with a break below the 50-day EMA potentially opening the door to deeper downside. Conversely, sustained strength above this level could encourage a short-term rebound, particularly if upcoming U.S. data underperforms expectations.
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