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Price now falls to a fresh low since May 3 and will be aiming towards support around 1,1135-40 next.
As it stands, the weakness in the pair is largely driven by dollar strength but that’s not to say that the euro isn’t weak either.
The single currency is still rather soft and as highlighted yesterday, it should remain the case ahead of key risk events later this week — barring any significant change in risk sentiment.
The two key risk events for the euro later this week both fall on Thursday with euro area flash PMI readings for May due on the day itself and the European Parliament elections also beginning that day. However, the elections will run until Sunday so any sentiment on that will run for a couple of days at least.
For the flash PMI readings, it’s a straightforward deal of looking at whether or not the euro area economic slowdown is continuing into Q2 2019. Meanwhile, for the elections, it is anticipated that the current establishment will lose a number of seats to the rising populists in the region. Although that isn’t likely to change the politics hierarchy in the euro area, it’s a sign of a change in the times in Europe and that could present to bigger risks in the future.
Hence, just be wary of any surprise results that could come about. That may impact the euro when markets reopen again next week.
For EUR/USD, downside levels are still defined by the May 3 low @ 1,1135 and the 26 April low @ 1,1112 currently. Meanwhile, topside levels remain limited by light offers and swing region around 1,1170 before further resistance is seen from the 100-hour MA (red line) @ 1,1178 and then the 200-hour MA (blue line) @ 1,1201. — forexlive.com
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