The Euro continues to struggle for a clear directional bias despite news that France and Germany are working on a strategy to respond to a global economic slowdown. The shared currency got underpinned after much better US data indicating that the US economy is far from recession and justifies the hawkish stance from Fed Chief’s Powell. Today, Germany will release August PPI, while the EU will publish the preliminary estimate of September Consumer Confidence. A weaker-than-expected data would validate the ECB’s recent ‘fresh stimulus’ decision and could push the Single currency lower. In the US, two speeches from Fed’s Williams and Rosengren are scheduled, as they will each comment on the latest monetary policy decision.
The Single currency remains trading in a narrow range, as the break to either side looks inevitable at this point. The bulls have to break above a multi-month bearish trend line, dating all the way back to July, and the 200-day moving average, to confirm their dominance in the market place. The bears on the other hand, need to break below the recent short-term uptrend and the 50-day moving average. The path of least resistance is clearly to the downside, but it is always better to wait for confirmation from the market before taking any action.
Support: 1.10 / 1.0930
Resistance: 1.1065 / 1.1110