The Euro closed positively on Friday as the Dollar lacked demand after the soft inflation report, adding more pressure on the Fed to cut rates. As a result, the market sentiment slightly turned bullish on the common currency, restricting the downside on this pair. Moreover, after having increased tariffs on $200 billion worth of Chinese goods from 10% to 25% on Friday, Trump warned China against imposing retaliatory tariffs. The US President said on Saturday that he would love to collect bigger tariffs if China retaliates. This trade war uncertainty could push the Dollar higher as traders run to a safe haven currency. With today’s quiet macroeconomic calendar, traders will keep an eye on any development in the ongoing US – China trade war.
The Euro traded higher on Friday but remained in the bears territory as long as price is under 1.1260 (R1). A break below 1.1230 (S1) could lead to further weakness in price towards 1.12 (bullish trend line) or even 1.1185 (S2). However, a break above 1.1260 could accelerate the bullish momentum for more upside potential towards 1.1280 (R2) and even higher.
Support: 1.1230 / 1.1185
Resistance: 1.1260 / 1.1280