EUR/USD: 10-day MA becomes resistance for first since June 25

• EUR/USD finds acceptance under key SMA, charts double top pattern. 
• German ZEW Survey is forecasted to show slight decline in economic sentiment. 
• The focus would also be on US stimulus talks and Sino-US tussle. 

EUR/USD closed below the 10-day simple moving average (SMA) for the second straight trading day on Monday, establishing the widely-tracked short-term SMA as resistance for the first time since June 25. 

While the 10-day MA is now sidelined near 1.1798, the 5-day SMA is trending south for the first time since June 5. Also, the pair looks to have carved out a double top pattern on the daily chart. All this indicates the bullish trend has run out of steam. 

German ZEW survey eyed

ZEW Economic Sentiment figures for Germany and the Eurozone are scheduled for release at 09:00 GMT. 

The German ZEW Economic Sentiment, which measures the difference between the share of investors that are optimistic and pessimistic, is forecasted to have dropped to 58.00 in August from July’s 59.3. A below-forecast print would strengthen the case for a notable pullback put forward by technical studies. 

Later in the day, the focus would shift to the US NFIB Business Optimism Index (Jul) and Producer Price Index (July). 

Apart from the macro data releases, the pair could take cues from the US Congress’ discussions and negotiations regarding the next federal stimulus package. President Trump said on Monday that that top congressional Democrats wanted to meet him for discussing virus-related economic relief, reviving hopes for additional stimulus. Also, news flow related to the lingering US-China tensions could influence demand for the safe-haven US dollar. At press time, the pair is trading largely unchanged on the day at 1.1747.

Technical levels