EUR/USD: Bears eyeing a test of 1.0500 ahead of German data?

The EUR/USD pair broke higher from its overnight consolidation phase in early Asia, before meeting fresh offers near 1.0550 to now extend the slide towards 1.05 handle, as we progress towards the European opening bells.

EUR/USD awaits German datasets

Currently, the spot now drops -0.11% to 1.0521, hovering within a striking distance of session lows struck at 1.0517 some minutes ago. The main currency pair stalled its minor-recovery mode and came under heavy pressure over the last hours, essentially on the back of pick-up in broad based US dollar demand as the Asian traders reacted positively to the increase US wages, and called for another raise in the Fed fund rates as early as this March.

Meanwhile, markets digest the latest comments from San Francisco Fed President Williams, who noted that the pace of Fed tightening remains dependent on the US economic growth prospects.

In the day ahead, the US dollar is expected to remain broadly bid amid renewed optimism on the US labor market, while the euro may seek some support from upcoming German industrial production and trade balance data, both expected to arrive a tad better than the previous readings.

While in the American session, we have the US LMCI data and a couple of Fedspeaks from Fed officials Rosengren and Lockhart, which will be closely eyed for fresh cues on the US interest rates outlook this year.

EUR/USD Technical Levels

In terms of technicals, the pair finds the immediate resistance 1.0562 (50-DMA). A break beyond the last, doors will open for a test of 1.0600 (round figure) and from there to 1.0654 (Dec 30 high). On the flip side, the immediate support is placed at 1.0508 (10-DMA) below which 1.0471 (20-DMA) and 1.0446 (Jan 2 low) could be tested.