German 10-year bond fell in the negative territory yesterday, dragging the Euro with it. European data had little effect on the shared currency, as GDP matched the forecast for Germany and the whole EU. However, the turning point was when the US Government decided to delay tariffs on car imports for six months, pushing equities higher and the Dollar lower. Despite the positive market sentiment, the common currency still looks vulnerable ending the day just above 1.12, key support area. Today, the macroeconomic calendar has some minor figures scheduled, as the Union will publish March Trade Balance and the US will release April Building Permits and Housing starts. The main sentiment driver remains the trade and tariffs war, so traders will be watching the wires very closely for any possible developments.
The Euro bears attempted to break below 1.12 during yesterday’s early hours, but price found support at 1.1185 and bounced back above the 1.12 key level to hold the bullish short-term trend line. The bulls will try to push price higher towards 1.1230 (R1) and possibly even 1.1260 (R2) if they found momentum. The bears however will attempt to break below 1.12 to retest yesterday lows 1.1185 (S1).
Support: 1.1185 / 1.1160
Resistance: 1.1230 / 1.1260