EUR/USD gains as Eurozone sentiment beats expectations at -1.8 vs -4.9

EUR/USD advanced 0.2% to 1.0935 in early European trading as Eurozone investor confidence surprised to the upside. The Sentix investor confidence index for January came in at -1.8, significantly better than the -4.9 forecast and improving from December's -6.2 reading. This marks the highest sentiment level since July 2025, with Germany showing particularly notable improvement. The positive data reinforces the view that the Eurozone economy may be stabilizing after months of weakness. Market participants are now eyeing upcoming ECB policy decisions, with reduced expectations for aggressive rate cuts given the improving sentiment. Technical indicators show EUR/USD testing resistance at 1.0950, with support established at 1.0900. A sustained break above 1.0950 could open the path toward 1.1000, while the improving economic backdrop suggests potential for continued euro strength against the dollar in the near term.