Forex - EUR/USD moves sideways on German confidence data

The euro moved sideways against the dollar on Tuesday, applauding eurozone industrial output data though a little spooked by German confidence numbers that missed expectations.

In U.S. trading on Tuesday, EUR/USD was up 0.01% at 1.2977, up from a session low of 1.2948 and off from a high of 1.3029.

The pair was likely to find support at 1.2941, Monday's low, and resistance at 1.3194, Wednesday's high.

In Europe earlier, the ZEW index of German economic sentiment rose to 36.4 in May from 36.3 in April, well below expectations for a reading of 38.3, which put pressure on the single currency.

The index of current conditions fell to 8.9 from 9.2 in April, which markets interpreted as a sign that the German economy could face headwinds in its quest to rebound from a 0.5% contraction in the fourth quarter.
Inflation in Germany, meanwhile, did not surprise.

The country's consumer price index contracted 0.5 % in April from March and rose 1.2% from April of last year, both figures in line with expectations.

Elsewhere, Eurostat, the European Union's statistics office, reported that industrial production in the euro area rose by 1% in March from February, more than double expectations for a 0.4% increase.

Also supporting the euro, Spain saw borrowing costs fall to the lowest level since 2010 at an auction of 12-month government bonds.

Meanwhile in the U.S., import prices dropped 0.5% in March, meeting market expectations, while export prices declined 0.7%, according to the Bureau of Labor Statistics.

The euro, meanwhile, was up against the pound and up against the yen, with EUR/GBP trading up 0.34% at 0.8510, and EUR/JPY trading up 0.30% at 132.52.

On Wednesday, the eurozone is to release preliminary data on first-quarter gross domestic product growth. 

Germany, France and Italy are to release individual data on first-quarter growth.

The U.S. is to release data on producer price inflation, industrial production, the capacity utilization rate and a report on manufacturing activity in New York State.