The Euro had a volatile session yesterday following ECB’s monetary policy decision sending the Single currency to drop, bounce and drop again. Mario Draghi hints a further rate cut and more stimulus in September as the ECB president laments worsening outlook. The greenback continues to remain strong ahead of today’s important US GDP release. The data is expected to show the economy expanded 1.8% in the second quarter following a 3.1% rise in the first three months of the year. A better-than-expected figure could force markets to scale back expectations of aggressive Fed easing, sending the US Dollar even higher across the board and the common currency below the yearly low 1.11. In case the data prints below estimates, markets will again price in prospects of multiple rate cuts before the year-end, sending the pair above 1.12.
The Single currency bears retested the 1.11 yearly low during yesterday’s session but the bulls were quick to react by sending the pair higher towards 1.1185 and away from the critical support. The bias remains slightly bearish as price remains below 1.1150 resistance. Traders awaits today’s fundamental catalyst to reestablish momentum to the appropriate side. A break above 1.1150 may send the Euro back towards 1.12. On the other hand, if the bears find the required momentum they could push the European currency below 1.11 for the first time this year.
Support: 1.1107 / 1.1050
Resistance: 1.1150 / 1.1185