The Euro closed positively on Friday as the greenback fell sharply versus its major competitors after the Fed officials re-enforced expectations of aggressive rate cuts in the coming months. The common currency also found support from an upbeat Euro-zone Industrial Production figures. However, further upside in the Single currency appears limited after the recent weak economic data from Euro-zone’s strongest economy, Germany. Additionally, ECB has been hinting of rolling out monetary stimulus once again by either cutting rates or restarting the QE program which adds further pressure on the Euro bulls. Market participants remain torn between the two dovish central banks without any clear direction.
The Euro attempted to once again break back above the trend line resistance (connecting May 30 and June 18 lows), but failed to close above it. The bulls are starting to lose momentum and a pullback towards 1.1245 seems likely in today’s session. However, if the buyers successfully break above 1.1275, then a 1.13 retest will be a very likely scenario.
Support: 1.1245 / 1.12
Resistance: 1.1275 / 1.13