Eurozone Business Activity Fades in May on War-Driven Inflation, Signaling Q2 Contraction

The fading of business activity in the Eurozone due to war-induced inflation and signs of contraction in the second quarter could negatively impact global risk appetite. This situation may increase exchange rate pressure in emerging markets such as Turkey and create selling pressure on the BIST 100. In the short term, weakness may be observed in the stocks of sectors exporting to Europe. However, markets are expected to focus on US data to keep the impact limited.

GOOGL shares fell 5.7% in the last close, with the RSI entering oversold territory at 25.6. The MACD is below the signal line and in negative territory, indicating weak short-term momentum. The price is trading below both the 20-day and 50-day moving averages, creating a negative technical outlook. News of a contraction in the Eurozone has heightened global growth concerns, potentially pressuring technology stocks. While the oversold condition could trigger short-term bargain buying, the overall downtrend suggests that bearish momentum may persist.

EUR/USD is trading at 1.1602, down 0.29% over the past 24 hours. Although the RSI at 34.7 is approaching oversold territory, the MACD remains below the signal line and in negative territory, indicating weak short-term momentum. The price is trading below both the 20-day (1.1618) and 50-day (1.1631) simple moving averages. News headlines highlight that Eurozone businesses are grappling with war-induced inflation, with expectations of a contraction in the second quarter, which could weigh on the euro. Given the combination of technical indicators and negative news, the likelihood of continued downward movement in the short term is high.

Although the DXY's RSI at 71.3 is approaching overbought territory, the MACD remains above its signal line, indicating positive momentum. The price is trading above both the 20-day and 50-day moving averages, supporting a short-term bullish trend. News headlines highlighting the weak economic outlook in the Eurozone could boost demand for the Dollar as a safe haven. However, the overbought signal and elevated price levels suggest that upside movement may be limited. Therefore, while the upward trend continues, caution is warranted.