The Euro continued to slide yesterday as the market is still digesting the trade deal optimism, which provides the Fed more room to pause the interest rate easing cycle. In other news, Christine Lagarde gave her first speech as the new ECB President, calling for strength, resolve, and courage. Despite expectations of her discussing monetary policy and her future plans, Lagarde honored the previous ECB President as a former IMF Chief, possibly signaling that she will follow his footsteps of zero-rate era. Today, traders will have some economic data to focus on for a change, as Germany will publish its Factory Orders and the Services PMI numbers, while the EU will release the Markit Composite and Services PMI and Retail Sales data. If most of the data beat expectations, then the Single currency might rally in the short-term.
The Single currency broke below the rising trend line dating back to first of October. This breakdown could signal a change in the medium-term trend to the bears’ side. Although the Euro found support at 1.1070, it might only be temporary, as the market sentiment turns bearish. Traders will be looking to retest the 200-day moving average in today’s session; any bounce to the upside will be an opportunity to sell from higher prices.
Support: 1.1070 / 1.1050
Resistance: 1.11 / 1.1120