The Euro drops further as the Eurozone’s GDP growth figure disappoints. The year on year GDP growth in Europe printed lower than expected at 1.7% compared to 1.9% which sparked another leg of selling for the Common currency. In addition to economic data, the lack of any positive development regarding Italy’s budget plan, continues to raise uncertainty about the future of the EU and lead to further weakening of the currency. For today, the focus will be on the release of the EU CPI figure as it will play a part in dictating the ECB’s monetary policy outlook during the next panel meeting. Moreover, traders need to also focus on a key economic metric released from the US, the ADP Non-farm Employment Change which will help predict if Friday’s Non-farm Payroll figure will disappoint or not.
As the negativity looms around the European economy, the Common currency drops towards the 1.1322 support level. According to the chart below, prices are clearly sloping downwards and trending continuously below the 13-period moving average. The continuous rejection of the 13-period moving average is a representation of the strong bearish momentum experienced by the pair. The next leg lower will be confirmed if prices break below the 1.1322 support level. The break below this support level will expose the next key level at 1.1285.
Support: 1.1322 / 1.1285
Resistance: 1.1446 / 1.1517