EUR/USD: Focus on 200-week MA support, put bias strongest in 7.5 weeks

• EUR/USD is closing on the 200-week MA. Technical outlook would worsen if that average is breached on a weekly closing basis. 
• The pair risks closing below the 200-week MA today, courtesy of fading prospects of ECB rate hike. 
• Investors are adding bets to position for weakness in the common currency, risk reversals show.  

The EUR/USD pair is currently trading at 1.1342 - within striking distance from the 200-week moving average (MA), currently at 1.1326. 

That long-term average has caught lows on a weekly closing basis several times in the last six months. So, acceptance below that key support would imply a resumption of the sell-off from 2018 highs above 1.25 and could yield a drop to the psychological support of 1.10. 

More importantly, markets are beginning to fear that Eurozone's waning economic fortunes may force the European Central Bank (ECB) to do away with its tightening plans. As a result, the EUR risks closing below the 200-week MA today. 

Validating that bearish case is rising demand for the EUR put options (bearish bets). One-month 25 delta risk reversals are currently trading in favor of puts at -0.637; the lowest level since Dec. 18. The negative number indicates the value of put options is more than that of call options. Put simply, the investors are adding bets to position for a deeper drop in the common currency. 

All-in-all, EUR/USD looks primed for a bearish weekly close. The bearish case could weaken if German exports data, due at 07:00 GMT, blows past expectations. 

EUR/USD Technical Levels