The common currency closed above 1.12 on Friday as US Core Durable Goods Orders missed market expectations. This consecutive weak data from the US is starting to worry market participants as the Fed could consider cutting rates if this weakness persists. Moreover, the single currency was bided higher after the provisional results on Sunday, showing the traditional center-left and center-right parties fell short of a majority for the first time, while Liberals including far-right parties in countries such as France and Italy made gains. We expect a slow day ahead amid a light Macroeconomic calendar as the US and UK markets are closed for holiday.
The Euro broke above 1.12 and continued to bid higher after the potential double bottom pattern from Thursday. Ideally, price needs to break above the recent high, 1.1260 to confirm this pattern. Currently price is trading just below a critical resistance level, 1.1220, if the bulls find momentum and break above it, then we could likely see more follow-through taking price higher towards 1.1240 and 1.1260 area. However, if the bulls lose their recent momentum, price could revisit 1.1180 support level.
Support: 1.12 / 1.1180 / 1.1150
Resistance: 1.1220 / 1.1245 / 1.1260