EUR/USD Forecast: Bearish bias remains despite the recent bounce, Euro-zone/German macro data eyed for fresh impetus

The EUR/USD pair built on the previous session's modest rebound from 23-month lows and gained some traction at the start of a new trading week, unaffected by the fact that Spain's Prime Minister Pedro Sanchez will require support from smaller parties to maintain power. A modest US Dollar pullback, amid some repositioning trade ahead of this week's FOMC meeting and important macro data later this week, turned out to be one of the key factors driving the pair higher.

The greenback did get a minor lift during the early North-American session following the release of stronger than expected personal spending data, which recorded the strongest growth in nearly a decade and jumped 0.9% in March. Meanwhile, personal income came in weaker than expected, which coupled with steadily cooling core inflation reinforced expectations that the Fed will stick to its cautious stance and eventually kept a lid on any meaningful up-move for the buck.

The pair finally settled near the top end of its daily trading range, around a previous support break-point - near the 1.1185 region, and held steady through the Asian session on Tuesday as market participants now look forward to key Euro-zone/German economic data for fresh impetus. The flash version of the Euro-zone GDP print, scheduled for release at 09:00 GMT, is expected to show that the economic growth stood at 0.3% q/q during the first quarter of 2019. This along with the prelim German CPI figures for April will influence sentiment surrounding the shared currency and produce some meaningful trading opportunities.

The US economic docket highlights the release of Chicago PMI and the Conference Board's Consumer Confidence index, though seems unlikely to be a major game changer ahead of the latest FOMC monetary policy update on Wednesday and Friday's important release of the closely watched US monthly jobs report (NFP).

From a technical perspective, the recent bounce might still be categorized as corrective in nature and hence, any subsequent move beyond the 1.1200 handle seems more likely to run into some fresh supply near the 1.1220-25 supply zone. However, a sustained move beyond the mentioned hurdle might prompt some additional short-covering move and lift the pair further towards 1.1255-60 intermediate resistance en-route the 1.1300 round figure mark. The latter marks the top end of a short-term descending trend-channel formation and might now be a tough nut to crack for bullish traders. 

On the flip side, immediate support is pegged near mid-1.1100s, below which the pair might head back towards challenging the 1.1100 round figure mark. A follow-through selling might turn the pair vulnerable to accelerate the slide further towards testing a medium-term descending trend-line support, extending from Aug./Nov. 2018 swing lows, currently near the 1.1060-55 region.