EUR/USD: Breaks key rising trendline ahead of EZ CPI release

• Euro breaks below ascending trendline and looks bearish as per technical studies.
• Weaker-than-expected EZ CPI could hurt the common currency.

The EUR/USD fell below the ascending trendline sloping upwards from the September low and the March low, signaling heightened odds of a downside break of the 11-week trading range of 1.2550-1.2150.

Focus on Eurozone CPI

The preliminary Eurozone consumer price index (CPI), due at 09:00 GMT, is expected to show the cost of living ticked higher to 1.4 percent year-on-year in March, compared to1.1 percent in February.

A weaker-than-expected CPI will leave the markets questioning the ECB’s ability to normalize policy and hence could push the Euro lower across the board. On the other hand, the common currency could retake the ascending trendline if the preliminary CPI release beats estimates.

Post-CPI release, the focus will shift to US ISM non-manufacturing scheduled for release at 14:00 GMT.

EUR/USD Technical Levels

The 5, 10 MAs (moving average) are biased bearish. Also, the spot trades below the 50-day MA. So, an acceptance below 1.2240 (March 20 low) would open up downside towards 1.2154 (March 1 low) and 1.2141 (100-day MA).

On the higher side, a clear move above 1.2345 (April 2 high) would open up upside towards 1.2446 (March 8 high) and 1.2476 (March 27 high).