The Euro fell yesterday almost to yearly lows amid macro growth and political uncertainty surrounding Brexit, but managed nevertheless to close just above 1.12. Today the common currency is trading higher on optimism over the announcement of a trade deal between the United States and China. Moreover, short-sellers are covering positions and taking profits after reports that PM May is ready for cross-party talks to break the Brexit deadlock ahead of the April 12 deadline. However, there hasn’t been a noticeable improvement in the EU sentiment amid weak data. The latest among them is Eurozone PPI that remained weaker than expected. Looking forward, the Eurozone composite PMI and the retail sales will be released from the EU, whereas PMI and ISM non-manufacturing PMI are on cards from the US side.
The Euro traded around 1.12 mark throughout the whole day, but today price bounced from that support to find resistance at 1.1225 (R1). The overall sentiment remains bearish but the gains could extend towards 1.1250 (R2) before the single currency resumes the downtrend. However, a break above 1.1250 (R2) could open doors for more strength on the Euro, possibly taking price back up to 1.13.
Support: 1.12 / 1.1175
Resistance: 1.1225 / 1.1250