Author: Assadour Khabayan
The Euro dropped to fresh yearly lows yesterday after the buying interest in the greenback intensified amid increased safe-haven demand, as US political worries continued to dampen the investor sentiment. Moreover, the recent dollar strength can be also attributed to the latest Fed’s repo that accelerated the short-term dollar funding and boosted the demand for the US currency across the board. While economic activity in the US has slowed, the Eurozone is under recession watch with the ECB Economic Bulletin yesterday highlighting trouble resulting from the divergence in course for the various member countries. While the Fed has cut rats twice, interest rates are still at 2.00 percent while the ECB pushed its deposit rate to -0.50 percent and restarted QE at its last meeting. Today’s Core Durable Goods Orders will likely set the tone of the market sentiment along with the Michigan Consumer Sentiment. If the data exceeds expectations, the Single currency will probably resume its downward trend.
The Single currency printed new yearly lows yesterday as the bearish domination continues to take place. The 1.0930 previous support must retest as a new resistance to confirm the next leg down on the common currency. If the sellers were able to break below 1.09, then the next line of support is around 1.0850. The bulls however, need to break back above 1.0930 and stay there to halt this current bearish momentum.
Support: 1.09 / 1.0850
Resistance: 1.0930 / 1.0966