The Euro dropped yesterday after it failed to break back above 1.13 as US-China trade tensions alongside expectations of a rate cut by the Fed are still weighing on market sentiment. Yesterday, US President Trump said that he has no deadline for making a deal with China, and more tariffs are coming, adding more pressure on the single currency. Also, the IMF warned the Euro zone to stabilize its budget to avoid any significant growth risks later this year. Today, US retail sales alongside a couple of major indicators from China (retail sales and industrial production) will be the main events on the calendar. A better than expected US data will diminish the probability of a rate cut from the Fed.
The Euro bears rejected 1.13 and pushed the pair below the 50-day moving average, possibly heading towards 1.1260. A break below this level will likely weaken the pair further towards 1.1220. The bulls need to regain momentum and push price above 1.13 to take back control.
Support: 1.1260 / 1.1220
Resistance: 1.13 / 1.1320