The Euro was pushed lower on Friday and retested the 1.10 level, after a much weaker German PPI data, which validated the ECB’s recent ‘fresh stimulus’ decision. However, the demand on the US Dollar declined after two contradictory statements from Fed’s Williams and Rosengren regarding interest rates. The former encouraging more rate cuts in the near future and the latter negating that view by saying that the US has survived trade war and doesn’t need rate cuts, adding later that interest rate cuts are not going to be ‘costless’. Looking forward, all eyes will be on today’s German Manufacturing and Services PMI, a weaker than expected data would likely cost the Single currency further damage and possibly push it below 1.10.
The Single currency broke out from the narrow range on Friday as the bears took over and retested the 1.10 support level. A retest of the 50-day moving average is likely before continuing its downward trajectory, in attempt to retest 1.0930 for the third time this month, as the path of least resistance remains to the downside. The bulls on the other hand, need to break above the multi-month bearish trend and the 200-day moving average to change the market sentiment to their favor.
Support: 1.10 / 1.0930
Resistance: 1.1065 / 1.1110