The Euro fell to new weekly lows during Tuesday’s session after continuous fear of a global economic slowdown, which led traders to flee to the Dollar as a safe haven asset. The common currency attempted a rally early in the session but that was contained by a selling interest triggered by worse-than-expected German data, as the IFO Consumer Confidence Survey for April came in at 10.4 vs 10.8 forecast. The decline was temporarily held by mixed US data with February's Housing Starts at -8.7% vs -0.8% expectations. Building Permits decreased by 1.6%, worse than the market's forecast of -0.6%, while the CB Consumer Confidence Index unexpectedly dropped to 124.1 points in March from 131.4 in February, reflecting arising concerns about a possible recession in the US. Today, ECB's Draghi is scheduled to speak, alongside a couple of other central bank representatives. Any negative comments from the ECB could push the Euro even lower.
The Euro dropped all the way towards our support level 1.1250 (S1), where price found some temporary support. We expect a push higher towards 1.1280 (R1) before another possible leg down on this pair. If, however, the bulls were able to break above 1.1280 (R1), then buying should accelerate pushing price to retest 1.13 (R2) or even 1.1325 (R3) in extension.
Support: 1.1250 / 1.1225 / 1.12
Resistance: 1.1280 / 1.13 / 1.1325