EUR/USD: downside constructive for a test of 1.1100?

Currently, EUR/USD is trading at 1.1121, down -0.24% on the day, having posted a daily high at 1.1166 and low at 1.1119.

 There was limited movement in response to the softer than expected PPI data out of Germany and a smaller current account surplus for the euro area. Releases are limited ahead of Friday’s flash PMI’s. However, in the US session, EUR/USD is extending the downside and now testing the critical 1.1120 support level at the time of writing. The 1.13 handle was a run too far last week and the downside is looking constructive with lower highs below 1.1165/70. The 10/21-day MA negative crossover Monday was a bearish signal as well while fundamentals are taking over with a resurgence in the greenback this week on that back of hawkish Fed speak against a backdrop of an upbeat FOMC last week. A break of the 38.2% Fibo of the May-Jun 1.0839-1.1296 rise (1.1120) now has 1.1100 looking exposed.

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EUR/USD levels

1.1229 Daily High Jun 15, 1.1215 Daily High Jun 19, 1.1207    21-Day MA, 1.1194 10-Day MA. To the downside, 1.1121 38.2% of 1.0839 - 1.1296, 1.1110 Daily Low May 30, 1.1075 Daily Low May 18. (We remain neutral in the absence of a break beyond either 1.11 or 1.13 - Scotiabank).