EURUSD ended flat on Tuesday, with the pair has been trading under a mild bearish pressure today as the greenback attempts to regain ground. The US dollar receives some support amid the risk-off environment that resumed after the Washington announced 10% tariffs on USD200B Chinese imports.
The price faced a stiff resistance level of 1.18 earlier this week, and since then, the euro struggles to resume the upside impetus, despite the bullish bias in the buck is rather muted. The recent pressure on the euro came from dismal German data as ZEW Economic Sentiment dropped to its lowest reading since August 2012, fueling concerns over the state of the largest euro area economy.
The single currency is looking forward to receive a fresh impetus which could come from Draghi’s speech later today. Any comments on the ECB’s monetary policy outlook could stir volatility in euro pairs.
Should Draghi be cautious or mention concerns over trade tensions and the regional economy, the EURUSD pair will challenge the 1.17 level once again, where the 20-DMA around 1.1650 will serve as rather a stiff support. Should the ECB governor not mention the monetary policy theme, the pair will continue to be guided by the overall USD sentiment.
By Helen Rush
Senior Analyst at Capital Markets