EUR/USD fails ahead of 1.2400 handle, EZ GDP up next

Haresh Menghani FXStreet

• Fails to gain traction despite some follow-through USD weakness.
• Traders shrug off German Economy Ministry’s upbeat assessment.
• EZ GDP/US macro data eyed for fresh directional impetus.

The EUR/USD pair extended its steady decline from one-week tops and has now surrendered a major part of its daily gains.

The pair stalled its recovery move from 3-week lows, set last Friday, and failed just ahead of the 1.2400 handle, despite a weaker tone surrounding the US Dollar.

In absence of any fresh development, the pair's retracement of around 30-35 pips from session tops could be solely attributed to some profit-taking. Meanwhile, traders seem to have largely ignored an upbeat economic assessment by the German Economy Ministry and preferred to wait on the sideline ahead of the flash Euro-zone GDP print.

Later during the early NA session, the US economic docket, featuring the release of key consumer inflation figures and monthly retail sales data, should also contribute towards infusing some volatility across the FX market.

From a technical perspective, the pair has broken below a short-term ascending trend-channel formation on the 1-hourly chart and hence, seems vulnerable to slide further.

Technical levels to watch

A follow-through weakness below the 1.2360 region might turn the pair vulnerable to head back towards retesting the 1.2300 handle. On the upside, the 1.2400 handle now seems to have emerged as immediate resistance, above which the pair seems more likely to dart towards reclaiming the key 1.2500 psychological mark.

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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