The Euro gained yesterday but the lack of strong follow-through could be associated with today’s ECB Draghi’s speech, as traders aren’t confident enough with the recent monetary policy decisions. The central bank said last week that it would delay its first post-2008 rate hike until middle of next year as Draghi offered to pay banks to lend to households and businesses, if the outlook for global growth darkens further. Moreover, the recent gains in the single currency will likely be short-lived, if the US reports a better-than-expected May CPI numbers.
The Euro bulls broke above 1.1320 yesterday signaling more possible gains targeting 1.1350. The market sentiment is bullish ever since the buyers broke above the bearish trend line in the beginning of June. If the buyers continue their momentum and break above 1.1350, then their next target would be 1.1370. However, the bears need to break at least below 1.1320 and ideally 1.13, to put on hold the recent bullish momentum.
Support: 1.1320 / 1.13
Resistance: 1.1350 / 1.1370