EUR/USD Pushes Toward 1.1800 as Germany Delivers a 5% Factory Orders Shock and Iran Peace Plan Gains Momentum

Traders' Opinions

Summary:

EUR/USD rises for a second consecutive day to 1.1765 as German Factory Orders surge 5% five times the forecast and Eurozone Retail Sales beat expectations despite the energy shock.

BUY EURUSD

EXP

PENDING

1.17650

Entry Price

1.18800

1.17000

1.17606 +0.00127 +0.11%

Pips

PENDING

1.17000

Exit Price

1.17650

Entry Price

1.18800

The Euro is having its best two-day run in weeks, and Thursday's data has given the single currency every reason to keep going. EUR/USD trades at 1.1765 at time of writing extending Wednesday's gains with the kind of broad-based fundamental support that does not reverse easily as a combination of surprisingly resilient Eurozone economic data and genuine diplomatic progress in the Middle East delivers the Euro a triple tailwind that Dollar bulls are struggling to push back against.

Germany delivered the session's most striking number. Destatis reported that German Factory Orders grew by 5% in March five times the 1% consensus forecast and a dramatic acceleration from February's already-revised 1.4% increase. In the context of an economy that the ZEW survey had declared was in contraction, a 5% Factory Orders beat is not a minor upside surprise. It is a structural reassessment moment one that forces analysts to revisit whether Germany's industrial base is proving more resilient to the energy shock than the sentiment surveys had suggested.

Eurozone Retail Sales added to the positive picture. Eurostat reported a 0.1% decline in March against a consensus expectation of a 0.3% drop a meaningful beat given the backdrop of elevated energy costs squeezing household budgets across the currency bloc. Year-on-year, sales grew 1.2%, topping the 1.0% forecast. The numbers confirm that European consumers, while clearly under pressure from the Hormuz-driven energy shock, are not capitulating at the pace that the most pessimistic forecasts had projected.

Together, these two releases challenge the narrative of an accelerating Eurozone economic collapse that had been building since March's PMI data and the ZEW crash. They do not eliminate the concern retail sales are still declining on a monthly basis and factory orders reflect orders placed before the sharpest phase of the energy crisis but they give the ECB's June rate hike case a credibility boost at a moment when some had begun to question whether the growth deterioration would force a delay.

Beneath the data, the real driver of the Euro's two-day recovery is the evolving diplomatic picture in the Middle East. Al Hadath the sister channel of Al Arabiya posted on X that talks to gradually reopen the Strait of Hormuz are in an advanced stage. Tehran is simultaneously reviewing a peace plan submitted by the United States. These are not vague diplomatic signals. They are specific, sourced, and credible enough to move oil prices materially lower and when oil falls, the Euro breathes.

The chain reaction is straightforward. Lower oil reduces inflationary pressure on Eurozone households and businesses. Reduced inflation pressure eases the ECB's policy dilemma. A less tortured ECB is a more credible institution and a more credible institution manages a more attractive currency. The Euro's correlation to oil prices during this conflict has been deeply inverse, and Thursday's crude retreat is delivering exactly the kind of fundamental relief the single currency needed to sustain a recovery above 1.1750.

Technical Analysis

After weeks of range-bound frustration between the 1.1680 and 1.1820 horizontal bands, EUR/USD is showing its most convincing bullish impulse of the entire consolidation period and the 2-hour chart is beginning to build the kind of structural evidence that makes the case for a sustained breakout increasingly difficult to dismiss. Price trades at 1.17667 at time of writing, having surged to 1.18000 earlier in the session before pulling back to retest the 1.1740–1.1760 area as support a pullback that, critically, has held with conviction.

The range that has defined this pair since mid-April is framed by two well-established horizontal levels. The 1.1680–1.1700 zone has served as the floor tested on multiple occasions throughout late April and early May and defended each time with sufficient buying interest to prevent a sustained breakdown. The 1.1800–1.1820 band represents the ceiling a zone that capped the April 17 spike and is now being challenged again following Thursday's fundamental catalyst combination of German Factory Orders and Hormuz peace progress.

The price action of the past 48 hours is what distinguishes Thursday's advance from the false starts that preceded it. The move from the 1.1680 lows of early May to the 1.1800 high covered 120 pips in a clean, impulsive sequence of higher lows and higher highs a structure that contrasts sharply with the choppy, directionless oscillation that characterised the preceding two weeks of consolidation. The subsequent pullback to 1.1740–1.1760 has produced a higher low relative to the May 5 base, which is the textbook first confirmation that a genuine trend reversal within the range is developing rather than another false dawn.

The dotted horizontal reference near 1.1760–1.1770 the level where price is currently consolidating represents the immediate support to defend. Buyers holding this level on the 2-hour timeframe while the projected path targets 1.1820 and beyond would confirm the base-building process is complete and that fresh momentum buyers are entering the market at each successive dip. A sustained 2-hour close below 1.1740, however, would suggest the recovery is struggling and risk a return toward the 1.1700 area before another attempt at the upper boundary.

The primary upside target is a clean, sustained break above 1.1820 the upper boundary of the multi-week range. The projected path drawn on the chart extends the move toward 1.1860 and potentially 1.1900 following that breakout, which would represent a complete trend change on the 2-hour timeframe and attract meaningful momentum-driven buying. The 1.1680 major support band remains the ultimate downside reference its breach would negate the bullish thesis entirely.

TRADE RECOMMENDATION

BUY EUR/USD

ENTRY PRICE: 1.1765

STOP LOSS: 1.1700

TAKE PROFIT: 1.1880

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EUR/USD Pushes Toward 1.1800 as Germany Delivers a 5% Factory Orders Shock and Iran Peace Plan Gains Momentum

Technical Analysis

Risk Disclosure