The Euro dropped as low as 1.1162 as the spread between the German 10-year and three-month Bund yields stayed in the negative territory. However, the downside in the Single currency has been restricted because of US-China trade tensions, protests in Hong Kong and US-Iran tensions. Nevertheless, the upside looks also limited after the bulls were rejected for the fifth time at the 200-day moving average yesterday. After all, the ECB is running a negative interest rate policy and the entire German yield curve is offering negative returns for the first time on record. Nonetheless, the European currency may pierce below the recent trading range if the German data disappoints expectations today.
The Single currency bulls were rejected at the 200-day moving average for the fifth consecutive day, after the bears retested 1.1160 support during yesterday’s session. Both the buyers and the sellers are lacking momentum for a significant follow through but the overall sentiment remains tilted to the bearish side. The bears need to break below 1.1160 to confirm further downside and the bulls need to take out 1.1250 to extend gains towards 1.1280.
Support: 1.1160 / 1.1110
Resistance: 1.1250 / 1.1280