Downward Pressure
Dear Traders,
Yesterday’s price action was relatively muted after Paris attacks had only a small impact on the currency market. The overall sentiment is bearish as investors remain focused on expectations for a Federal Reserve liftoff as soon as next month, while the U.S. dollar also benefited from safe haven flows.
The euro broke below its low at 1.0674 and the trend is heading downward.
Here is where we see current resistances and supports:
| Resistances | Supports | |
| EUR/USD | 1.0705
1.0750 1.0805
|
1.0635-20
1.0575 1.0550
|
The most important piece of data from the eurozone will be the German and Eurozone ZEW Survey, due for release at 10:00 GMT. Even if data surprises to the upside, the market’s reaction could be muted as the recent attacks might have a negative impact on economic confidence.
The British Pound traded sideways, unimpressed by geopolitical developments. We expect volatility to increase with the release of U.K. Consumer Prices today at 9:30 GMT. If data is in line with expectations, the impact on the pound could be limited, but given the latest dovishness of the Bank of England, traders should generally favor a bearish bias. A next important support could be at 1.5135-25. Below 1.5125, a sustained break of 1.51 is needed to reinforce fresh bearish potential. Short-term resistances are seen at 1.5215 and 1.5245.
Furthermore, U.S. Consumer Prices are scheduled for release at 13:30 GMT today. Any major surprises should have a significant impact on the greenback.
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