“¢ Disappointing German ZEW survey triggered the initial leg of downtick.
“¢ A modest pickup in the USD demand further accelerates the intraday slide.
The EUR/USD pair tumbled to fresh session lows in the last hour, with bears now eyeing a follow-through weakness below the 1.1200 round figure mark.
The pair failed to capitalize on its early uptick, rather faltered near mid-1.1200s following the release of softer German ZEW survey. The German ZEW Economic Sentiment slipped to 2.1 in May, pointing to pessimism over the economic outlook and exerted some downward pressure on the shared currency.
Meanwhile, the latest leg of a sudden drop over the past hour or so could further be attributed to a modest pickup in the US Dollar demand. After spending a major part of Tuesday’s trading session in the negative territory, the greenback regained some positive traction and was supported by a modest recovery US Treasury bond yields.
This coupled with possibilities of some intraday trading stops being triggered below 100-hour SMA further collaborated towards accelerating the downward momentum, though showed some resilience near the 1.1200 handle amid absent relevant fundamental catalyst/news and thus, warrants some caution for bearish traders.
Technical levels to watch
As Yohay Elam, FXStreet’s own Analyst writes: “Support awaits at 1.1220 that was a swing low earlier today and also held the currency pair down last week. 1.1175 was a swing low last week and so was 1.1135. The 2019 trough of 1.1110 is next.”
“Initial resistance is at 1.1250 that held EUR/USD down late last week. Monday’s high at 1.1265 is also a double-top after capping a rise in early May. The next levels to watch are 1.1280 and 1.1325 that defined the limits of a high range that was seen in mid-April,” he added further.
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