Euro edges higher despite geopolitical woes, soft German data

• EUR/USD picks up to 1.1750 on Friday, but remains trapped within recent ranges.
• Risk appetite ebbed on news that the US and Iran exchanged fire in the Strait of Hormuz.
• German Industrial Production and Trade Balance data have shown weaker-than-expected figures in March.

The Euro (EUR) posts moderate gains against the US Dollar (USD) on Friday, trading a few pips shy of the 1.1750 level at the time of writing, to reverse part of Thursday's losses. The common currency has shrugged off a moderate risk aversion amid escalating tensions in Iran and weak German figures seen earlier on the day, although it remains trapped within the last three weeks’ trading range, below the 1.1800 area.

Risk appetite ebbed on Friday as reports of fire exchange between the US and Iran in the Strait of Hormuz have clouded hopes of an upcoming peace deal. US President Donald Trump, however, affirmed that the ceasefire remains standing and urged Tehran to sign a deal. Iranian authorities, meanwhile, are studying a 14-point US proposal to end the conflict.

In Europe, German data released on Friday was not particularly supportive. Industrial Production contracted for the second consecutive month in March against market expectations of a rebound, and the Trade Balance shrank beyond forecast, also in March, as an unexpected increase in exports was offset by a sharp rise in imports.  

Later in the day, the focus will shift to the US Nonfarm Payrolls (NFP) report, which is expected to show a significant slowdown in employment creation in April. Investors will be particularly attentive to these figures, as they might shed some more light on the Federal Reserve's rate path in a context of growing divergences within the monetary policy committee.

Technical Analysis: Bulls remain capped below 1.1800

EUR/USD holds a modest bullish bias as it stabilizes above the day’s open at 1.1726, but momentum indicators are mixed. The 4-hour Relative Strength Index (RSI) is hovering around 54, while the Moving Average Convergence Divergence (MACD) turns marginally negative and flattens, hinting at waning upside pressure.

From a wider perspective, the pair is bouncing back and forth within a horizontal range, with the resistance area between 1.1790 and 1.1800 (April 20, May 6 highs) posing a barrier for bulls. The pair seems to need additional impetus to break above those levels and set the focus on April's high, in the 1.1850 area.

On the downside, session lows, just above 1.1720, are likely to provide support for a potential bearish reversal, although the key area for bears lies between 1.1645 and 1.1675, which halted sellers several times in April.

(The technical analysis of this story was written with the help of an AI tool.)