The Euro neutralized any bullish outlook during yesterday’s session as investors rushed to the US Dollar after the probability of a Fed rate cut decreased during this week’s FOMC meeting, amid fear of inflation after the recent Oil price surge caused by the attacks on Saudi Arabia. Additionally, today’s German ZEW Economic Sentiment is crucial for the state of the Eurozone and the Single currency. A big beat on expectations is needed to diminish German recession fears and lift the common currency back towards 1.11, while weaker-than-expected print will likely pave the way for a retest of the yearly low 1.0930s.
The European currency broke below the 1.1065 support yesterday and went on retesting the next level of support 1.10. The bias remains with the sellers, as the bearish narrative has not changed for now, thus the probability to retest the yearly lows for the third time this month remains high. However, we could possibly see a short-term rally towards the 50-day moving average before price rolling over.
Support: 1.10 / 1.0930
Resistance: 1.1015 / 1.1065