- EUR/USD is reporting losses, having faced rejection at the 200-day MA in Asia.
- That long-term average is the level to beat for the bulls.
- An above-forecast German IFO is needed to lift the pair above the 200-day MA.
- ECB’s Lagarde is unlikely to sound dovish.
The selling interest in EUR/USD has picked up pace following repeated failures to beat the 200-day moving average a resistance and a bigger slide could unfold in Europe if key German data disappoints expectations.
200-day MA is tough nut to crack
EUR/USD is currently trading at 1.1134, representing a 0.13% drop on the day, having faced rejection at the 200-day average at 1.1151 during the Asian trading hours.
Notably, the bulls failed to secure a daily close above the long-term average for the fourth straight day on Tuesday, as the spread between the US and German 10-year bond yields widenedby nearly five basis points to 218 basis points.
A strong UTC close above the 200-day MA is needed to revive the short-term bullish view.
Focus on German data and Lagarde’s speech
The German IFO survey, due at 09:00 GMT, is expected to show the expectations index rose to 93.0 in December from 92.1, according to the latest survey of analysts.
An above-forecast reading is needed to validate last week’s ZEW survey, which showed the German economy has bottomed out, and draw bids for the common currency.
A big beat on expectations will likely yield a move above the 200-day MA at 1.1151. That said, the bulls need a convincing daily close above the key hurdle, as noted earlier.
European Central Bank’s President Lagarde is scheduled to speak at 08:30 GMT. Lagarde is unlikely to sound dovish and will likely reiterate the need for fiscal stimulus.
Technical levels
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