A drop in German business sentiment to its lowest since early 2010 stoked concerns about a slowdown in the euro zone's largest economy, despite the European Central Bank's recently announced bond-buying plan.
Spain also remained in focus, as its government bond yields rose on concerns that the country is dragging its feet in requesting the international bailout that most market participants expect, through facilities such as the European Stability Mechanism (ESM).
"Market sentiment weakened amid signs of weak EU growth and worries about whether Spain will accept conditionality in exchange for ECB and ESM support
EUR/USD is slightly bid above the 1.2930 mark as markets in Tokyo and Sydney open this Tuesday, but may reverse and continue its decline as disappointing economic data out of Germany and as concerns over Europe returned to the spotlight.
Technically speaking, "A daily descendant trend line coming from 1.3170 highs lies today around 1.2980, acting now as limit for current bearish tone, as only above that level the pair may continue advancing, Bigger time frames are also looking bearish at the time being, although a break below 1.2880 is now needed to confirm more slides this Tuesday."
If EUR/USD does sip below mentioned support, bids may likely be found at the 200-day EMA (1.2854), while the 100-hour EMA at 1.2973 is level to overcome for upside rallies.
Regional equities are likely to trade with a negative tone tracking weakness in stocks on Wall Street. At the time of writing, Japan 225 is quoted down 25.79 points, or 0.28% at 9043.50, while S&P/ASX 200 is trading 14.07 lower, or 0.32% at 4371.40.
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