German ZEW Index Highlights European Session; Light Calendar Ahead

Tuesday's European trading session centers on Germany's ZEW Economic Sentiment index, expected to maintain elevated levels following last month's significant rebound to 47.5 from 41.8. The improved sentiment reflects easing trade war concerns, recent ECB rate cuts, and expectations of expansionary fiscal measures across the Eurozone. EUR/USD trades steady near 1.0825 ahead of the release, with traders positioning cautiously given the light economic calendar. The optimism in German business sentiment could provide support for the euro, particularly if the reading exceeds expectations. Market participants note that sustained improvement in European economic indicators may challenge the ECB's dovish stance, potentially limiting further rate cuts. Technical analysis shows EUR/USD consolidating within a 1.0800-1.0850 range, with a breakout likely dependent on the ZEW data and any shifts in broader risk sentiment throughout the session.