The Euro slumped and formed a new yearly low at 1.1215 as combination of fundamentals continue to pressure the European currency. Most notably, the ongoing raft between the EU and the Italian government in regards to Italy’s proposed budget plan for 2019, which does not comply with EU standards. Secondly, the uncertainty surrounding Brexit as Prime Minister Theresa May’s Brexit plan faces strong opposition from political parties in the UK, where many fear that Britain will remain indefinitely within the EU’s customs union, disallowing the UK from making its own private trade deals. Thirdly, last week’s negative economic remarks from Mario Draghi who warned of possible slowdown in the euro zone’s growth in the next two years. Lastly, the Euro is aggressively being pressured by a stronger US Dollar which continues to rise after last week’s hawkish remarks from the US Federal Reserve. For today specifically, traders need to monitor the release of the Eurozone’s ZEW Economic Sentiment figure and monitor how the disagreement between the EU and Italy unfolds as today marks the deadline for Italy to revise its budget plan.
The Euro breaks below the 1.1299 support level and forms a new yearly low at 1.1215. The price momentum is clearly bearish as all the three major moving averages are edging lower. The next drop lower towards the 1.1150 support level will be triggered by a break below the new low at 1.1215.
Support: 1.1215 / 1.1150
Resistance: 1.1299 / 1.1347