The Euro dropped to 1.1060s during the first half of Friday’s session after Building Permits in the US beat market expectations. However, the weak Michigan Consumer Sentiment improved the Single currency bulls mood, but not enough to close the week above 1.11. Looking forward, the common currency could rise against the greenback if German yields recover on fiscal stimulus hopes. The yield on the German 10-year bond yield remained under pressure throughout last week as investors piled into safe-haven assets on fears of a European recession. Nevertheless, the yield recovered after Der Spiegel magazine said the German government is considering ditching its balanced budget rule and could take on new debt to counter a possible recession, giving the European currency bulls some hope in the short-term outlook.
Despite the short-term optimism on the Euro, the pair remains under pressure, as price needs to break above 1.1110 first to confirm a short-term recovery towards the 1.1160 area. Or else, the bearish domination will resume pushing price to retest Friday’s low 1.1067 and possibly extend the weakness towards the yearly low, 1.1027.
Support: 1.1027 / 1.0950
Resistance: 1.1110 / 1.1160