EUR/USD has eroded key long-term rising trendline ahead of EU summit

• The EUR trades below the trendline sloping upwards from the March 2015 low and April 2017 low.
• If EU Summit fails, it could have a negative impact on Merkel and EU's future and could hurt the common currency.
• Preliminary German CPI and US Q1 GDP could also influence the pair.

The EUR/USD fell below the long-term ascending trendline (drawn from the March 2015 low and April 2017 low), possibly due to political instability in Germany.

German Chancellor Merkel came under fire as her Bavarian ally threatened mutiny on the migrant crisis.

Focus on EU Summit

The European leaders are scheduled to meet in Brussels today to resolve their differences over the bloc’s three-year migrant crisis. If the Summit fails, then the Merkel's coalition government could collapse, leading to a big sell-off in the common currency.

Further, the EUR will likely be offered if the preliminary German CPI for June prints below estimates. Meanwhile, the USD may find offers if the US Q1 GDP is revised lower.

At press time, the currency pair is trading at 1.1566.

EUR/USD Technical Levels

Resistance: 1.1617 (200-hour moving average), 1.1631 (50-hour moving average), 1.1672 (resistance as per the hourly chart).

Support: 1.1540 (previous day's low), 1.1508 (June 21 low), 1.1397 (200-week MA).