The Euro fell during yesterday’s session following the release of the German and the EU ZEW Economic Sentiment, which both contracted in April, flagging more possible trouble ahead in the Euro area. However, the main catalyst for the sell-off was when Italy’s PM Salvini said the country is ready to break EU budget rules if necessary to stimulate employment, renewing Italian economic uncertainty. Today, traders will turn their attention to the German and the EU GDP data, if results exceed expectations, then that could boost the market sentiment pushing prices higher in the short-term.
The Euro closed just above the 1.12 trend line support which is also the 50-day moving average. The bears found momentum to push price lower once it broke below the 1.1230 and the 200-day moving average. The bulls need to protect the 1.12 at all cost if they want to stay in control and push the common currency higher. However, if they fail, the pair could further extend the weakness towards 1.1185.
Support: 1.1185 / 1.1170
Resistance: 1.1230 / 1.1260