EUR/USD Trading Weak at 1.1180, US Data Eyed
After breaking below 1.1200 handle, the EUR/USD
pair extended its slide on disappointing German ZEW economic sentiment
to currently trade at 1.1180, few pips of session through level of
1.1168.
The pair accelerated its fall towards 100-day SMA support near 1.1160
after the German business sentiment unexpectedly deteriorated in May.
The headline ZEW economic sentiment printed weaker-than-expected reading
of 6.4 in May as compared consensus estimates of further acceleration
to 12.1 from April's 11.2. Meanwhile, the current situation index ticked
higher to 53.1 from 47.7 recorded in April.
With the US Dollar extending its bid tone on increasing prospects of a
Fed rate-hike in June, weaker business sentiment from Euro-zone's
largest economy gave bears the opportunity to drag the EUR/USD pair back
below 1.1200 handle. Investors now turn their attention to the only
important release from the US, new home sales data for the month of
April, later during NA session, which if comes-in better-than expected
would open room for further depreciating move for the pair.
Technical outlook
Valeria Bednarik, Chief Analyst FXStreet, noting the bearish set-up,
writes, "Technically, the 4 hours chart shows that the price bounced
modestly from the mentioned low, but also that it remains capped by a
bearish 20 SMA. In the same chart, the technical indicators have turned
south from around their mid-lines, with the RSI heading south around 33,
all of which favors additional slides on a break below 1.1160, the
immediate support."
"Approaches to the 1.1210 region could see selling interest resuming,
although some gains beyond it could see the pair recovering up to the
1.1240/50 region."
