The drop towards 1.10 was interrupted yesterday as traders booked profits on the US Dollar on fear of possible additional rate cuts by the Fed, after a weaker-than-expected ISM Manufacturing PMI data. Additionally, Trump announced a new round of tariffs on China which accelerated a US Dollar sell-off across the board, helping the Euro gain some ground. A combination of escalating trade tensions and a below-forecast US payrolls figure could strengthen the cases for additional rate cuts by the Fed in the near future, leading to broad-based losses in the greenback. However, the Single currency could drop below 1.10 if today’s NFP data blows past expectations.
The Euro bulls were able to hold 1.1030 as support and pushed prices up just below the 1.11 resistance. The bias remains with the bears, as the sellers will have the psychological figure 1.10 at their sight, as long as the common currency is trading below 1.11 and the 50-day moving average. Any break above 1.11 or 1.1160 will be advantageous for the bulls to stop the recent bearish domination.
Support: 1.1035 / 1.10
Resistance: 1.11 / 1.1160