EURUSD slide on Monday morning despite better IFO data from Germany as the gradual reopening of the economy boosts hopes for a fast recovery. Germany IFO Business Climate came in at 79.5, beating the expectations of 78.3 in May. The Current Assessment came in at 78.9 below the forecasts of 80. The IFO Expectations came in at 80.1 topping the expectations of 75.
Germany GDP -2.2% In Line with Expectations
Earlier today reported that Germany Gross Domestic Product for the first quarter of 2020 came in at -2.2% in line with expectations while the yearly Gross Domestic Product reading also matched expectations at -1.9. Expectations are for the worst second quarter as the coronavirus lockdown severely damaged the economy.
EURUSD slapped the previous week at the 200-day moving average (1.1012) and retreated below the 1.09 mark. The escalation of tensions between China and the USA on a new security law in Hong Kong shift trader’s attention to safe-haven assets and the USD.
EURUSD traders focus on the debate around the common relief bond (500bn) proposal from France and German. Four member countries, Denmark, Austria, the Netherlands and Sweden, are against the proposal and will come with another suggestion.
EURUSD is 0.16% lower at 1.0881, hovering above the 50-day moving average and questioning the recent bullish breakout. The technical outlook is bearish now for the pair as it failed at the 200-day moving average. A break below the 50-day SMA might accelerate the selling pressure.
On the upside, the first resistance for EURUSD stands at 1.0908 the daily high. If the pair breaks that resistance, then the next target is at 1.0946 the high from Friday’s trading session. A convincing break above might open the way for a test of the 200-day moving average at 1.1011.
On the flipside, immediate support for the EURUSD stands at 1.0870 the daily low. Next support zone would be met at 1.0803 the low from May 18th trading session. If the EURUSD breaks that support level, then the next target for sellers is at 1.0771 the low from May 14th trading session.