The Euro had a volatile session yesterday with the pair temporary recovery, but failed to preserve the intraday gains. The common currency surged after the UK PM May presented her new Brexit deal but the momentum quickly ran out of the steam and closed relatively unchanged for the day. The US Dollar remained strong as the Fed Chair Powell denied the possibility of any immediate rate cut. Moreover, market sentiment remains bearish by renewed concerns over Italy’s fiscal issues and the widening US-German yield. Traders are getting ready for today’s scheduled speech by the ECB Draghi and the release of minutes from the latest FOMC monetary policy meeting. Given the recent disappointed EU economic data, Draghi is more likely to remain dovish and open for more stimulus if the economy needs it, keeping the pressure on the Euro. Meanwhile, a neutral to hawkish tone by the FOMC policymakers will be enough to boost the already stronger greenback.
The Euro attempted to break above 1.1170 resistance but the bears were waiting on the other side to limit the gains. The sellers are still under full control as the weak price action favors their narrative for now. A break below 1.1142 will open doors for the 1.1110 yearly low retest. However, if the bulls were successful in breaking above 1.1170-80 area, then we will likely see a short-term bounce towards 1.12.
Support: 1.1142 / 1.1110
Resistance: 1.1170/ 1.1180