EUR/USD Stalls After Closing Gap as Eurozone Uncertainty Persists

EUR/USD has closed its recent price gap but is struggling to generate upward momentum, reflecting a market caught between conflicting forces. The pair remains under pressure as traders weigh deteriorating Eurozone economic sentiment against broader dollar dynamics. Germany's ZEW economic sentiment index plunged to -17.2 in April, far worse than the -5.0 consensus, marking the lowest reading since December 2022. The sharp decline in investor confidence is largely attributed to the ongoing US-Iran geopolitical conflict, which has driven energy prices higher and weighed on European economic prospects. The euro's inability to sustain gains after filling the gap suggests underlying bearish pressure remains intact. With the ECB potentially reassessing its policy stance amid worsening economic conditions and elevated energy costs, traders should monitor whether the pair can hold current levels. Near-term resistance is likely capped around the gap-fill level, while a failure to build on the recovery could see EUR/USD retesting recent lows. The pair's direction will hinge on upcoming Eurozone data and geopolitical developments.