The Euro continued to unwind yesterday as traders are fleeing to the greenback for safety fearing the escalating trade tensions between US and China. The common currency could suffer a deeper drop if today’s German jobs data miss expectations. A bigger-than-expected decline will likely boost the fears of deeper economic slowdown in the Eurozone’s largest economy and push the single currency towards the recent low of 1.1108. Traders will also keep an eye on German Buba President Weidmann’s speech and the ECB Financial stability report for any possible directional clues.
The Euro broke below a key level, 1.1180, yesterday and found a temporary support at 1.1160. The 50-day moving average is acting as resistance for now, but a retest of the recently broken support, 1.1180, is expected before any bearish continuation. The bears will target next 1.1150 and then the yearly low, 1.1108. The bulls, however, need to regain the 1.1180 level or else they will remain dominated by the bears.
Support: 1.1150 / 1.1108
Resistance: 1.12 / 1.1220