The Euro got rejected around 1.12 at the 200-day moving average, and closed negatively on the day, signaling a potential end of this counter-trend rally. The negative sentiment came back to the market on reports that the EU is considering disciplinary action of $4 billion penalty over Italy’s failure to control public debt. Today, a below-forecast German consumer confidence will likely hurt the common currency even further. An above-forecast reading however, could help it to capitalize on the short-term bullish reversal which was confirmed on Friday.
The Euro found resistance at the 200-day moving average and broke below 1.12 as the bears found momentum once again to potentially continue the overall trend. The bears are facing one more major support, 1.1180, before regaining full control. A break below this level could push price towards 1.1150. The bulls, however, need to regain momentum and push price above 1.12 to stop the bears’ dominance.
Support: 1.1180 / 1.1150
Resistance: 1.12 / 1.1220