The Euro witnessed an aggressive selling last week after the escalating US-China trade war and Brexit threats weighed on the German and Eurozone economy, which the latest German retail sales and softer Eurozone inflation showed concerns of economic slowdown. Despite the Italian 5-Star Movement and Democratic Party having tried their best over the weekend to hammer out a deal on a common agenda and Cabinet posts, the Single currency bulls remain unimpressed, as price keeps trading below the psychological figure 1.10. Additionally, the US economy continues to hold relatively stronger despite looming US-China trade risks. Therefore, market participants are favoring the USD at the expense of the Euro, as the ‘safer’ currency, after the greenback reached the highest levels since May 2017 at 99.02 across its main competitors. Today, the German Manufacturing PMI numbers will be vital, if the data missed the forecast it will add even more pressure on the common currency and could potentially push it towards new yearly lows.
The Single currency broke below the yearly low 1.1027 and took out the 1.10 psychological figure, to sell-off as low as 1.0963 during Friday’s wild session. Currently, the pair is trading just below 1.10 but price action remains to be weak, as the bears will attempt to retest Friday’s low 1.0963 and possibly even lower. The bulls on the other hand, will try to push price higher, at least above 1.10 to avoid throwing in the towel.
Support: 1.0963 / 1.0940
Resistance: 1.10 / 1.1027