EUR/USD desperately trying to claw back 1.20, but German GDP could be blocking the way

The EUR/USD is drifting slightly higher in the Asia markets, trading into 1.1965 ahead of a quiet European open.

The Euro is looking to stage a third straight day of recovery against the US Dollar after sliding 4.75% from April's high into a five-month low at 1.1822 amidst a broad-market Greenback correction coupled with lagging economic figures for the European continent.

EUR/USD analysis: correction could continue, trend change not yet certain

Monday brings little data to the table, and the EUR/USD may be looking at a smooth ride, at least until Tuesday. German and Euro-area GDP preliminary figures drop on Tuesday beginning at 06:00 GMT, and traders are bracing for an expected contraction in the German GDP figures from the previous quarter's 0.6% to 0.4%, while EU-wide GDP is expected to stall once again near 0.4% for the quarter.

US Retail Sales (excl. autos) is expected to shift upwards to 0.5% from 0.2% on Tuesday at 12:30 GMT, but first will be Monday speeches from the US Fed's Mester and then Bullard, at 06:45 and 13:40 respectively.

EUR/USD levels to watch

Euro bulls are pushing hard for a bullish correction that should, in theory, be long overdue; but the EUR/USD's technical outlook continues to break bearish, and as FXStreet's Chief Analyst Valeria Bednarik noted, "from a technical point of view, the daily chart suggest that, if the mentioned 1.1960 Fibonacci level is conquered, the pair can continue advancing up to the 1.2050 price zone, the next Fibonacci resistance and where the pair has its 200 DMA, as indicators have recovered from extreme oversold readings, heading higher, however, below their midlines. in the same chart, the 20 DMA maintains a sharp bearish slope and is poised to cross below the mentioned 200 DMA, reinforcing the resistance area. The short-term picture, according to the 4 hours chart, confirms the longer term perspective, as the price develops below its 20 SMA, while technical indicators hold within positive territory, the Momentum advancing and the RSI consolidating around 57. In this last chart, the 100 SMA heads sharply lower, at around 1.2050, further making of the area a major resistance level."

Support levels: 1.1915 1.1880 1.1840  

Resistance levels: 1.1960 1.2000 1.2045