EUR/USD has extended gains, approaching the key 1.0500-1.0530 resistance zone as the dollar remains under pressure. Improving eurozone sentiment, highlighted by a strong German ZEW survey, suggests that upcoming PMI data could support further upside in the pair. Historical data indicates a high probability of stronger German PMI readings when economic sentiment and current conditions rise, adding to bullish expectations. Additionally, weaker U.S. jobless claims and soft Philly Fed data have reinforced the recent decline in Treasury yields, accelerating dollar weakness.

From a technical perspective, EUR/USD remains in an uptrend, trading above its 5-DMA while RSI indicators rise. Resistance lies at 1.0500-1.0530, with a breakout targeting 1.0600-1.0630. However, downside risks persist, with initial support at 1.0435, followed by 1.0419 and 1.0380. A failure to hold above these levels could shift momentum back in favor of the dollar, reinforcing longer-term bearish trends.

Friday’s eurozone and U.S. PMI reports will be crucial for near-term direction. A strong eurozone print could extend the rally, while robust U.S. data could see the dollar regain strength. Longer-term risks remain tilted to the downside due to the potential for U.S. trade tariffs and a still-resilient U.S. economy. As long as EUR/USD holds above 1.0435, the near-term bias remains bullish, with 1.0500-1.0530 as the key breakout zone to watch.