The Euro attempted to break above 1.13 yesterday but weaker German Retail sales and Spanish Unemployment Change kept the pressure on the Single currency. Moreover, IMF’s Christine Lagarde wins EU support to lead ECB starting October. Lagarde didn’t lose much time and immediately praised negative interest rates, signaling market participants what’s to come. In economic news, June Markit Services PMI for Germany is scheduled for release today, however after yesterday’s weak manufacturing data, the service sector may have experienced a slowdown as well. On the other hand, the common currency may show resiliency and rise above 1.13 if the US treasury yields continue to slide after it fell below 2% yesterday, the lowest level since November 2016.
The Euro bulls couldn’t break above 1.13 as the bears are in control in the short-term outlook. If the sellers will be able to keep the pressure on the single currency, we will likely see a retest of a very important support, 1.1250, which is also the 200-day moving average and the bullish trend line which started since the beginning of June. The bulls, however, will reattempt to break above 1.13 to stop this current bearish domination.
Support: 1.1250 / 1.12
Resistance: 1.13 / 1.1350