EUR/USD Price Forecast: Limited Bullish Scope Amid Market Optimism

Current Market Overview

As of May 13, 2025, the EUR/USD currency pair is trading at a rate of 1.1126. Recent economic data from Germany and the broader Eurozone indicated an improvement in economic sentiment, highlighted by the ZEW Survey results. Meanwhile, the latest U.S. Consumer Price Index (CPI) figures pointed to a lower-than-expected inflation rate, contributing to a subdued outlook for the USD.

Economic Indicators and Sentiment

The ZEW Survey’s findings from Germany showed a significant rise in economic sentiment from -14 in April to 25.2 in May. However, this positive news was somewhat countered by a deterioration in the current situation assessment, which fell from -81.2 to -82—worse than the anticipated -77. Across the Eurozone, economic sentiment also improved, moving to 11.6 from its previous value of -18.5. Simultaneously, U.S. inflation data revealed that the CPI increased by 2.3% year-over-year in April, slightly below the predicted rate and last month’s reading of 2.4%. On a monthly basis, CPI rose by 0.2%, surpassing the previous month’s decline of -0.1%, yet falling short of the expected 0.3% rise. Despite this mixed economic backdrop, the U.S. Dollar showed only a minor decline in response to the economic data, suggesting that it does not compel the Federal Reserve to alter its monetary policy stance.

Technical Outlook for EUR/USD

Examining the short-term technical landscape for the EUR/USD pair, it remains locked within a consolidative phase around the 1.1100 mark. Analysis of the daily chart reveals the pair trading well below a bearish 20 Simple Moving Average (SMA) but above the 100 and 200 SMAs, which are positioned significantly lower at over 300 pips under the current trading levels. While technical indicators are showing signs of recovery, they remain lodged in negative territory, insufficient to signal a potential bullish breakout.

In the near-term perspective, the trend appears bearish. On the four-hour chart, EUR/USD continues to trade under all significant moving averages, with the 20 SMA crossing beneath the 200 SMA around the 1.1200 level. Technical indicators suggest corrective activity from oversold conditions; however, they have since flattened out within negative ranges, reflecting a lack of interest from buyers.

Support and Resistance Levels

Analysts have identified key support and resistance levels that traders should be aware of as the market moves forward:

Support Levels: 1.1070, 1.1025, 1.0990
Resistance Levels: 1.1150, 1.1195, 1.1240

Market Conclusion

Overall, while there is some optimism in the market due to improving economic indicators from Europe and a slight easing in U.S. inflation, the outlook for the EUR/USD pair remains cautious. The combination of limited bullish potential and bearish technical indicators suggests that significant movement is unlikely in the near term. Traders will need to remain vigilant as market conditions evolve and new data emerges.

As always, market participants are advised to conduct thorough research and analysis before making trading decisions, considering the inherent risks associated with trading in the foreign exchange market.