The Euro could not break above the critical resistance during Friday’s session, as the greenback remains the stronger currency among market participants, despite the probability of Fed interest rate cut during this week’s FOMC meeting. The interest rate differential will continue favor the US regardless, even as low as interest rates are in the States, they are at least still positive. Whereas, EU’s bond interest rates are all negative yielding. Additionally, the EU has to deal with the fact that Germany is entering recession, Italy already being there, and other issues with many other member countries. As a result, the overall sentiment remains bearish on the Single currency.
The Single currency retested the critical resistance 1.1110 along with the 200-day moving average but got rejected, as the bearish trend remains intact. The bears are back in advantage as the path of least resistance remains to the downside. If 1.1065 is taken out in today’s session, the sellers will likely retest 1.1015 support. The buyers, on the other hand, need a strong close above 1.1110 to invalidate the bearish narrative.
Support: 1.1065 / 1.1015
Resistance: 1.1110 / 1.1165