EUR/USD: Drop in Greek 10-year yield to 13-year lows fails to put a bid under EUR, eyes on German ZEW

• EUR created a doji candle yesterday, establishing the area above 1.1320 as the level to beat for the bulls. 
• The shared currency is struggling to pick up a bid despite tighter Greek-German 10-year government bond yield spread. The Greek 10-year bond yield fell to a 13-year low yesterday. 
• A better-than-expected German Zew survey, due at 09:00 GMT, could yield a sustained move above 1.1320. 

The shared currency's struggle for a convincing move above 1.13 continues for the third day despite the drop in the Greek 10-year bond
yield and tighter Greek-German bond yield spread.  

Greek government bond yields fell to near record low levels yesterday in response to comments by a senior official that a deal to repay
International Monetary Fund loan is imminent. 

Notably, the 10-year yield fell to slipped to 3.29 percent, its lowest since September 2005 and the spread with the German counterpart
narrowed to 232 basis points - the lowest since February 2018. 

The tightening of Greek-German yield spread is known to put a bid under the common currency. This time, however, the narrowing of
Greek-German yield spread has failed to lift the shared currency. In fact, the pair created a doji candle yesterday with a long
upper wick yesterday, establishing Friday's high of 1.1324 as the level to beat for the bulls. 

A close above 1.1324 would invalidate the doji candle and signal a continuation of the rally from the recent low of 1.1184. That looks likely in case the German Zew surveys beat expectations by a big margin, alleviating concerns of a deeper economic slowdown in the Eurozone's biggest economy. The bullish case may strengthen if the Greek 10-year yield hits record low below 3.203 percent. 

On the other hand, a close below 1.1298 (doji's low) would imply an end of the bounce from the lows near 1.1180. A weaker-than-expected German Zew data could push the common currency well below 1.1298. 

Technical Levels