EUR/USD Trading Weak at 1.1180, US Data Eyed

EUR/USD Trading Weak at 1.1180, US Data Eyed

24 May 2016, 13:16
Roberto Jacobs

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."


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