The Euro attempted to break above 1.13 for the second consecutive day but failed to hold its gains and closed below the psychological round number despite a slightly better Euro-zone Services PMI. The US Dollar slid in the negative territory for a brief period following President Trump’s tweet accusing China and Europe of “currency manipulation”. Trump is sending an indirect message to the Fed, asking once again for a rate cut to devalue the Dollar, in order to compete with other major economies. Looking forward, a better-than-expected Euro-zone retail sales data may put a bid under the Single currency today. However, any bullish move will likely be short-lived if ECB members De Guindos and Enria sound dovish. The liquidity may be thin today as the US is closed on account of Independence Day holiday.
The Euro bears showed their dominance once again as breaking above 1.13 looks an impossible feat for the bulls so far. The common currency could devalue towards the anticipated 1.1250 major support in today’s session. The bulls will have their last chance to give everything they have got to push price higher in order to remain in control in the big picture. A break below that level, however, will weaken the Single currency much further.
Support: 1.1250 / 1.12
Resistance: 1.13 / 1.1350