EUR/USD wavers above 1.1000, but looks vulnerable

The EUR/USD pair trades around a flat-line as we head into early Europe, having found strong support at 1.1000 levels amid a broadly stronger US dollar and mixed sentiment.

EUR/USD eyes a break below 1.10 handle

Currently, EUR/USD now trades -0.05% lower at 1.1016, having run into strong resistance ahead of 1.1020. The main currency pair extends its bearish momentum induced by worse-than expected German ZEW Survey into Europe, although now consolidates the downside for the next leg lower, as markets speculate that a break below 1.10 barrier is likely to trigger a massive sell-off towards 1.0900-1.0850 levels. For such a move lower, the ECB decision due tomorrow could emerge the key catalyst.

On Tuesday, the headline German economic sentiment index is seen dropping sharply to 8.2 in June after a solid rebound to 19.2 booked in May.

Moreover, renewed strength seen in the greenback against a basket of six major currencies, in wake of upbeat US housing starts and home construction activity, also keeps the EUR?USD undermined.

Markets now await the German PPI data and Eurozone current account data due later in the session, in absence of no economic releases in the US docket.

EUR/USD Technical Levels             

In terms of technicals, the pair finds the immediate resistance 1.1089/1.1100 (200-DMA/ round number). A break beyond the last, doors will open for a test of 1.1172 (50-DMA). On the flip side, the immediate support is placed at 1.1000 (round figure) below which 1.0984 (daily S1) could be tested.