The Euro gained some ground yesterday as a relief rally after Friday’s major sell-off. Today, traders will have a full macroeconomic calendar to stay entertained for the whole day. Better-than-expected German and Euro zone ZEW surveys could extend this recent bullish rally on the single currency. Apart from ZEW surveys, Euro zone May inflation is expected to remain low, giving no room for Draghi to sound hawkish later in the day. The ECB President is expected to give a speech regarding the monetary policy at the ECB’s annual forum in Portugal, which could also have an impact on the market sentiment. While the US central bank is expected to keep rates unchanged tomorrow, today’s US housing data could reinforce the Fed to lean on the dovish side if it misses estimates by a big margin.
The Euro bounced from the 200-day moving average and broke back above the 1.1220 resistance level. The bulls are looking for any catalyst to push the single currency higher and retest 1.1260 resistance line. The buyers need to stay above the 200-day moving average and the 1.12 psychological support to stay in control. If the bears manage to break below those levels, then we could revisit the 1.11 lows very soon.
Support: 1.1220 / 1.12
Resistance: 1.1260 / 1.13