EUR/USD: 5-day EMA is a key resistance, focus on Eurozone GDP & German CPI

The 5-day exponential moving average (EMA) has proved a tough nut to crack for three straight days.
The bearish pressure may ease above the 5-day EMA.
The 4-hour chart is reporting a bullish divergence of the relative strength index (RSI).
An above-forecast German CPI and Eurozone GDP could bode well for the common currency.

Omkar Godbole FXStreet Contributor

The 5-day EMA of 1.1397 is the level to beat for the EUR bulls. This is because the key EMA acted as a stiff resistance in the last three days.

The bearish pressure around the common currency will likely wane if the pair convincingly beats the 5-day EMA hurdle. That could happen today as the currency pair charted a bullish RSI divergence on the 4-hour chart yesterday.

Further, risk sentiment likely stabilized in Asia. The S&P 500 futures gained 0.5 percent and the Shanghai Composite erased early losses to trade in the positive territory. As a result, the European equities and the EUR could remain better bid during the day ahead.

Focus on Eurozone data releases

The preliminary third-quarter GDP, due at 10:00 GMT, is expected to show that growth rate remained unchanged at 0.4 percent quarter-on-quarter, but slowed to 1.8 percent year-on-year, from the previous quarter's print of 2.1 percent.

Meanwhile, the preliminary German CPI for October is expected to print at 0.1 percent month-on-month, following September's 0.4 percent reading.

An above-forecast German CPI and upbeat Eurozone GDP could boost demand for the EUR. However, the prospects of a convincing move above the 5-day EMA would drop sharply if the Italy-German yield spread spikes, representing rising concerns about Italy's budget.

Technical Levels

EUR/USD

Overview:
    Last Price: 1.1382
    Daily change: -1.5e+2 pips
    Daily change: -1.29%
    Daily Open: 1.1531
Trends:
    Daily SMA20: 1.1571
    Daily SMA50: 1.1584
    Daily SMA100: 1.1623
    Daily SMA200: 1.1909
Levels:
    Daily High: 1.154
    Daily Low: 1.1531
    Weekly High: 1.1551
    Weekly Low: 1.1336
    Monthly High: 1.1816
    Monthly Low: 1.1526
    Daily Fibonacci 38.2%: 1.1496
    Daily Fibonacci 61.8%: 1.1472
    Daily Pivot Point S1: 1.1453
    Daily Pivot Point S2: 1.1392
    Daily Pivot Point S3: 1.1351
    Daily Pivot Point R1: 1.1555
    Daily Pivot Point R2: 1.1596
    Daily Pivot Point R3: 1.1657

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

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