The Euro slips further as political unrest in the region continues to take a toll on the currency. Italy’s government officials are currently showing stubbornness on their opinion regarding the country’s proposed budget plan for 2019 signaling that the political instability within the EU will not end anytime soon. Additionally, ECB President Mario Draghi’s speech did not help the currency either as he informed the market that his panel’s policy guidance will remain unchanged, which signaled lack of hawkishness. For today, investors will shift their focus towards the US Dollar as US GDP data is set to be released later during the day. A lower than expected number will signal a slowdown in economic growth and raise the probability that the Fed will alter their hawkish monetary policy. Speculation that the Fed will alter their monetary policy will lead to a US Dollar sell off and push the Common currency higher.
After breaking the 1.1416 support level, the Euro fell towards the 1.1360 support level. Clearly, momentum is bearish given that prices continue to track below the 13-period moving average. Additionally, prices are also well off below the 50 and 200-period moving averages signaling that the long term bias of the pair is bearish. A break below the next support level at 1.1322 will pave the way for a drop towards 1.1285.
Support: 1.1322 1.1285
Resistance: 1.1416 1.1517