The Euro continues to gain ground against the greenback after fears that the US Federal Reserve may deliver additional rate cuts of 50 to 75 basis points before the end of the year if the US-China trade tensions do not subside. President Trump raised the stakes in his trade war with China by threatening new tariffs on Chinese imports, which made Beijing to vow of retaliation. Earlier this morning, China asked State buyers to halt US agriculture imports, adding fuel to the fire. The Single currency might continue its recent strength but the big picture remains bearish. In macroeconomic news, traders will be looking out for any possible improvements in the German and the Eurozone Services PMI, which could add more short-term bullish strength on the common currency. On the other hand, a better-than-expected ISM Non-Manufacturing PMI data will likely help to stabilize the current bearish momentum on the US Dollar.
The Euro bulls continue to march forward by breaking above 1.1107 and the 50-day moving average, targeting next 1.1160 and possibly 1.1185. Keeping in mind the sentiment will remain bearish as long as price is trading below 1.12. Thus we could likely see some sellers show up around 1.1185 and 1.12 pushing price lower. The bears need to break below 1.1107 to regain control.
Support: 1.1107 / 1.1035
Resistance: 1.1160 / 1.1185