EUR/USD Reverses Sharply from Monthly High, Back Below 1.1400 Handle
After printing monthly high level of 1.1416, the EUR/USD pair erased early Asian session gains and turned lower, dropping back below 1.1400 handle to currently trade near session low level.
The sudden reversal in the EUR/USD major could be attributed to slowing German exports that added to the ongoing concerns of global economic slowdown. According to a report released by German statistics office, Destatis, German exports remained unchanged in April while imports fell 0.2%.
The export data signaled a slowdown when compared to a remarkable growth of 1.4% and 1.9% in February and March respectively. Meanwhile, trade surplus for the Euro-zone's largest economy rose to its highest level on records to 24 billion in April.
With only weekly jobless claims data scheduled for release from the US, the pair is likely to derive its move based on the sentiment surrounding the greenback.
John Benjamin, Analyst at Orbex notes, "EURUSD attempted to breakout from the inside bar's range from Monday's price action, but the breakout is not quiteconvincing unless we see a strong follow through today. Failure to close above Monday's range high of 1.1392 could signal a move back into the range keeping prices sideways in the near term. On the 4-hour chart, the price action is seen consolidating into a rising wedge pattern and a bearish divergence at the same time, which points to a possible downside breakout in prices. Closing below 1.138 could signal EURUSD to extend declines back to 1.12170 resistance which was broken and could now be tested for support."