EUR/USD breaks below 100-DMA after US new home sales data

Bears tightened their grip on the EUR/USD pair and dragged it back to 100-day SMA for the first time since early March. The pair has now weakened to its lowest level since late March.

Disappointment from German ZEW economic sentiment led to the pair's break-down below 1.1200 handle and accelerated the fall towards 100-day SMA support near 1.1150 region.

Moreover, a stronger-than-expected US new home sales data provided additional boost to the USD bulls. The US Dollar strength across the board seems to force USD bears to unwind their bearish bets, thus accelerating the fall in the EUR/USD pair.

Even from technical perspective, the pair is on the verge of a further break-down below 100-day SMA, below which the ongoing downward trajectory could get extended further.

Technical levels to watch

On a sustained weakness below 100-day SMA (1.1155-50 region), the pair is likely to drop towards testing a medium-term ascending trend-channel support, currently near 1.1100-1.1095 area.

Meanwhile on the upside, 1.1200 support break-down point, now seems to act as immediate resistance. Beyond 1.1200 resistance the pair might extend its recovery but the recovery might now be restricted around 1.1235-40 horizontal region. Only a decisive strength back above this strong resistance might negate the bearish outlook and pave way for further near-term upward trajectory for the pair.