The Euro took a beating during yesterday’s European session with the pair falling briefly to a new 2019 low, 1.1108, as German and Eurozone manufacturing PMI numbers missed market expectations. However, the losses were completely reversed in the North American session as the US, in its turn, released the worst manufacturing and services PMI numbers since 2016. This broad weakness on the US Dollar could be the beginning of a short-term reversal so the greenback sell-off will likely continue today bidding the Euro up. The EU macroeconomic calendar looks very light today as ECB Nowotney’s speech is the only event, nevertheless traders will remain focused on the current “Euro Short-Squeeze” sentiment.
The Euro printed a potential double bottom yesterday as price strongly reversed from the 1.1110 yearly low. This move has the potential to change the overall trend (bearish to bullish), but price needs to confirm first. The bullish momentum will likely continue today taking the common currency higher to retest the trend line around 1.1220. Only a break above that key level could signal a potential bullish reversal on this pair. The bears however look powerless today, as yesterday's short-squeeze session made a huge impact on the market sentiment. The sellers need to break back below 1.1142 to regain momentum.
Support: 1.1170 / 1.1142 / 1.1110
Resistance: 1.1185 / 1.12 / 1.1220