The Euro drops as risk off sentiment returns to the market following the escalation in the trade war between the U.S and China. Earlier today, Trump's administration officially imposed a 10% tariffs on $200 billion worth of Chinese imports. The Chinese government retaliated immediately by imposing a 5 to 10% tax on $60 billion worth of U.S goods sold in China. Adding to the negative sentiment in the market, Brexit negotiations fell into a loophole once again as the EU leaders rejected Theresa May's Chequers Plan. The Chequers Plan rejection prompted Theresa May to state that a “no deal Brexit is better than a bad deal Brexit” which signaled negativity around the negotiations going forward. For today, the pair will be driven by any developments surrounding the trade war between the U.S and China as well as the planned release of the German Ifo Business Climate Index.
From a technical standpoint, the pair is ranging within the 1.17454 support level around the 13-period moving average. A break above the range at 1.17605 will prompt investors into pumping the pair all the way towards 1.18215. However, a break below the range at 1.17233 will expose the next support level at 1.16414.
Support: 1.17233 1.16414
Resistance: 1.17605 1.18215