The Single currency bounces off the 1.13182 support level as the increase in risk appetite pushes the higher beta currencies upwards. Earlier during the trading day, China's Ministry of Commerce said that they will be holding a new round of trade talks with the U.S by the end of this month. Investors expect that these talks will ease tensions between the two nations which will reflect positively on the global economy. Keep in mind that the economic slowdown witnessed in China last month reflected badly on Europe as demand for European imports fell. Hence, easing tensions between the U.S and China will spur growth in the Chinese economy and thus lead to a rise in the demand for European goods. The recovery in the Euro might not continue for so long as fresh data is set to be released from the U.S today. A beat from U.S's Building Permits and U.S's Philadelphia Fed Manufacturing Index figures might pump some strength into the greenback and push the Common currency lower.
The Common currency recovers upwards after rejecting the 1.13182 support level. For now two scenarios are possible, the Euro either breaks above 1.13987 exposing the 50-period moving average at 1.14545, or the currency breaks below the 1.13182 at the second attempt and the pair drops towards 1.12433.
Support: 1.13182 1.12433
Resistance: 1.13987 1.14545