EUR/USD dips below 1.14, focus on US unit-labor costs

• EUR/USD again sees a shallow bounce from the 200-week MA. 
• A below-forecast German factory orders print may bolster fears of a deeper economic slowdown in Eurozone. 
• A strong US unit-labor costs data may revive Fed rate hike talk, sending the USD higher across the board. 

EUR/USD is currently trading just below 1.14, having clocked a high of 1.1514 last week. 

The pair is increasingly looking heavy, having faced repeated rejection at 1.15, despite the persistent defense of the 200-week moving average (MA) over the last six months. 

The 10-week moving average (MA), currently at 1.1386, could be breached if the German factory orders for December, due at 07:00 GMT, miss expectations by a big margin, making Germany more vulnerable to a recession. 

Focus on US unit-labor costs

The unit-labor costs are forecast to have risen 1.7 percent in the fourth quarter, following a 0.9 percent rise in the third quarter. 

Unit-labor costs are one of the key inflation numbers that the Federal Reserve monitors closely. 

A weaker-than-expected print would validate Fed's patience on rate hikes and could put a bid under EUR/USD. 

However, if the data matches or beats expectations, then markets may begin considering the possibility of a single 2019 rate hike. In that case, treasury yields will likely spike, lifting the greenback higher across the board. 

EUR/USD pivot points