The European currency is trapped in a 100-pip range since July 9, as the market is confused between pricing in an aggressive or soft Fed easing. On Friday, the Euro dropped towards 1.12 after NY Fed President John Williams walked back on his latest dovish comments (to cut 50 basis point) by saying his speech was not about potential policy action at the upcoming FOMC meeting. The weak German PPI data also contributed to the Single currency’s drop. Today, with the light macroeconomic calendar, the trading session will probably be slow unless a Fed member intervenes and leaves a comment on rate cut expectations, or Trump administration drops a headline regarding the trade war.
The Euro bulls couldn’t break above 1.1275 on Friday, which is also the 200-day moving average, and dropped hard back towards 1.12 to resume this latest range trading. Not the bulls nor the bears are finding enough momentum to break above or below those critical levels. Price will remain in consolidation with no bias until we see a clear break to either side for further continuation.
Support: 1.12 / 1.1185
Resistance: 1.1240 / 1.1275