EUR/USD Edges Higher as Eurozone Sentiment Beats Forecasts Despite Lingering Risks

EUR/USD saw modest upward pressure following the release of Eurozone economic sentiment data for May, which came in at 93.5, surpassing the expected 92.8 and improving from a revised prior reading of 93.2. Despite the beat, the indicator remains well below its long-term average of 100, reflecting persistent headwinds from the ongoing Middle East conflict. The breakdown reveals a mixed picture: industrial confidence deteriorated further on the month, while a minor rebound in services confidence provided the primary lift. The data suggests the Eurozone economy is stabilizing but far from robust recovery territory, keeping the European Central Bank's easing bias intact. For EUR/USD traders, the modest improvement supports near-term consolidation rather than a decisive breakout. Key resistance lies near recent session highs, while support is anchored around prior weekly lows. Traders should monitor upcoming Eurozone inflation data and any escalation in geopolitical tensions, which could quickly reverse the tentative improvement in sentiment and weigh on the euro.