The Single currency moves back up as the U.S Dollar weakens. In the past two trading days, the greenback tried to break above its 1-year high but failed. This failure paved the way for U.S Dollar bears to pile on short positions which led the currency to drop even further. This drop in the U.S currency helped the Euro regain some strength. Fundamentally, the U.S Dollar remains stronger given the series of positive economic releases, hawkish Federal Reserve, and higher U.S treasury yields. The rise in the Euro is mainly attributed to profit taking from greenback bulls and yesterday's retracement will pave the way for a continuation in the Euro's bear trend.
After bouncing off the 1.15495 support level, the pair broke the 1.16161 resistance level. Given the fundamental strength with the U.S Dollar, the Euro will either start dropping from this current level or test the 1.16480 resistance level and drop. However, a break above the 1.16480 will signal that the bear trend may have shifted.
Support: 1.16161 1.15495
Resistance: 1.16480 1.16795