The combination of a much worse German Economic Sentiment data and a better US CPI numbers capped the upside potential for the Euro yesterday, after price attempted to extend gains beyond the 200-day moving average for the sixth consecutive day. Today it will likely be a make or break day for the common currency as German GDP is expected to show the economy contracted both on Quarterly and Yearly basis. If the forecast is true, then that will be a bad news for the Single currency, considering that the German bond market is pointing to a recession for a while now, as the entire German yield curve has entered the negative territory for the first time on record.
The Euro bulls were rejected at the 200-day moving average for the sixth consecutive day, but this time the bears broke below the 50-day moving average, signaling a fading bullish momentum. The bears are waiting for today’s fundamental catalyst to find the necessary momentum to break below 1.1160, exposing 1.1110 and possibly 1.1027 for a possible retest. The bulls on the other hand, need to break above 1.1250 to regain control.
Support: 1.1160 / 1.1110 / 1.1027
Resistance: 1.1250 / 1.1280