Core Viewpoint - The Euro/USD exchange rate is experiencing a narrow fluctuation below the 1.14 level as the market awaits key economic data from Europe and the US, with a critical directional choice looming due to a strong resistance level [1] Fundamental Analysis - The recent pressure on the US dollar is attributed to two main factors: a significant decline in US Treasury yields, with the 10-year yield dropping from 4.59% to around 4.25%, and signs of easing in the Trump administration's trade policies, which have reduced the market's demand for the dollar as a safe haven [3] - The Eurozone's economic recovery shows structural divergence, with Italy's Q1 GDP growth at 0.3% (YoY 0.6%), slightly above market expectations, while Germany's GDP growth was only 0.2% (YoY -0.2%), highlighting the challenges faced by the manufacturing sector due to global trade weakness [3] - This divergence limits the upward potential of the Euro, although the European Central Bank's relatively hawkish stance compared to the Federal Reserve supports the exchange rate [3] Technical Analysis - The daily chart indicates that the Euro/USD has maintained an upward trend since the January 2025 low of 1.0177, reaching a peak of 1.1572 in April, but is now facing strong technical resistance at the Fibonacci 76.4% retracement level of 1.1683 [3] - The MACD indicator shows a clear bearish divergence, while the RSI is hovering between 60-68, suggesting a potential weakening of upward momentum [3] - On the weekly level, the 14-week RSI remains in an upward trend, but a close below 1.1271 this week would confirm a short-term top formation [4] Market Sentiment - Despite marginal improvements in Eurozone economic data, market sentiment remains cautious, with Italy's GDP exceeding expectations providing some support for the Euro, while concerns about the sustainability of the Eurozone recovery persist due to Germany's economic weakness [4] - CFTC positioning data shows an increase of 23,000 net long positions in the Euro as of April 23, but this has not broken through the 2024 high, indicating limited enthusiasm for chasing the rally [4] Monetary Policy Expectations - Diverging monetary policy expectations continue to develop, with the US core PCE price index expected to fall to 3.3% in March, leading to increased market expectations for a rate cut by the Federal Reserve this year [5] - In contrast, European Central Bank officials have signaled a "no rush to cut rates" stance, with futures pricing indicating that the ECB's first rate cut is expected to occur about three months later than that of the Federal Reserve, providing mid-term support for the Euro [5] Market Strategy - In terms of technical strategy, if the exchange rate effectively breaks through the 1.1450-1.1500 resistance zone, bullish targets could be set at 1.1683, with key support levels at 1.1271 and the psychological level of 1.1000 [6] - Conversely, if the rate falls below the 1.1300 support, caution is warranted regarding potential pullback risks, with targets shifting to the 1.1271 and 1.1000 areas [6] - Key data points to monitor include the US April non-farm payroll report (expected to add 180,000 jobs), the Eurozone's April CPI preliminary value (expected YoY 2.4%), and the Federal Reserve's May interest rate decision statement, as these will be crucial catalysts for breaking the current fluctuation pattern [6]