EUR/USD: Back below 100-day MA, focus on German yields
|- EUR/USD's breakout above the 100-day MA was short-lived.
- German 10-year yield dropped four basis points on Tuesday.
- Focus today is on EU's consumer confidence data and German yields.
EUR/USD is flashing red, having found acceptance below the 100-day moving average (MA) on Tuesday. The common faced selling pressure, possibly due to the drop in the British Pound triggered by the Brexit impasse.
Brexit optimism had pushed the common currency above the 100-day MA on Oct. 18. The follow-through to the breakout, however, was weak.
The pair created an inverted hammer on Monday and closed well below the inverted hammer's low of 1.1139 on Tuesday, confirming a bearish reversal.
The EUR, therefore, could suffer a deeper drop, especially if the German 10-year bond yield extends Tuesday's four basis point drop to -0.38%.
Also, the US Dollar may draw haven bids, adding to the bearish pressures around EUR/USD, courtesy of the risk-off mood in the equity markets.
On the data front, EU's Consumer Confidence is scheduled for release at 14:00 GMT. Elsewhere, ECB's Andrea Enria is scheduled to speak at an event in Madrid at 08:45GMT.
Technical analysis
AceTrader writes:
Although price has retreated after Monday's brief break of Friday's high at 1.1173 to a 2-month peak at 1.1179 and minor consolidation would be seen, as 1.1140 has contained downside, upside bias remains and above said resistance would extend upmove from October's 28-month trough at 1.0880 to 1.1209/10 later before prospect of correction due to loss of momentum.
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