- The Euro bounced up strongly after Friday's reversal, but it has stalled below the 0.9730 - 40 area.
- Weak eurozone Consumer Confidence data has eroded confidence in the Euro.
- Failure to extend gains beyond 0.9740 might give hope for bears to retest 0.9675.
The Euro bounced up sharply after fears of an escalation of the Middle East conflict pulled the pair to test the lowest levels in the last six weeks. The pair returned to previous levels, favoured by a frail risk appetite but it remains capped below previous support at 0.9730 - 40 so far.
In the Eurozone, the unexpected deterioration of the region’s Consumer Confidence Index has failed to provide confidence in the pair. Somewhat later ECB Chair Lagarde will meet the press. She will likely confirm that the Bank is planning to start lowering rates soon, probably in June. The risk of the Euro is skewed to the downside.
On Tuesday, the Eurozone PMI data will provide further insight into the area’s growth prospects and might give some guidance to the common currency. In Switzerland, the ZEW survey, on Wednesday and, above all, SNB’s Jordan speech on Thursday will be the highlights of the week.
From a technical perspective, the failure to extend gains beyond 0.9730 leaves the pair in no man’s land. Above here, the next target would be the April 11 high, at 0.9815 and the April 5 high at 0.9850. Immediate support remains at 0.9675. Below here, 0.9620 and 0.9560 will be targeted.
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