EUR/USD: 5-day EMA is a key resistance, focus on Eurozone GDP & German CPI

The 5-day EMA of 1.1397 is the level to beat for the EUR bulls. This is because the key EMA acted as a stiff resistance in the last three days.

The bearish pressure around the common currency will likely wane if the pair convincingly beats the 5-day EMA hurdle. That could happen today as the currency pair charted a bullish RSI divergence on the 4-hour chart yesterday.

Further, risk sentiment likely stabilized in Asia. The S&P 500 futures gained 0.5 percent and the Shanghai Composite erased early losses to trade in the positive territory. As a result, the European equities and the EUR could remain better bid during the day ahead.

Focus on Eurozone data releases

The preliminary third-quarter GDP, due at 10:00 GMT, is expected to show that growth rate remained unchanged at 0.4 percent quarter-on-quarter, but slowed to 1.8 percent year-on-year, from the previous quarter's print of 2.1 percent.

Meanwhile, the preliminary German CPI for October is expected to print at 0.1 percent month-on-month, following September's 0.4 percent reading.

An above-forecast German CPI and upbeat Eurozone GDP could boost demand for the EUR. However, the prospects of a convincing move above the 5-day EMA would drop sharply if the Italy-German yield spread spikes, representing rising concerns about Italy's budget.  

Technical Levels