The Euro once against held familiar ranges, trading to an overnight low at 1.07747 (above strong support at 1.0760) before rebounding to close just above 1.08 at 1.0803. EUR/USD saw an overnight high at 1.08239. The shared currency continued to grind lower with the 1.0800 as a sticky pivot area.
The Euro area economic calendar heats up today with Germany’s Q1 GDP, the Eurozone’s GDP, EZ Trade Balance and Employment Change. A steep contraction is forecast for Germany’s GDP report.
We highlighted earlier this week that net speculative Euro long bets (week ended 5 May) were trimmed to -EUR 76,299 contracts from -EUR 79,681 but remains stubbornly high at 89% for year’s top. A sustained break lower will see these long bets scramble for cover. Only then when the bulk of them are out can it be safe to buy the shared currency.
EUR/USD has immediate resistance at 1.0830 (overnight high 1.0824) followed by 1.0870 and 1.0900. Immediate support can be found at 1.0780 and 1.0760. A break of 1.0760 will see 1.0730 and 1.0680. Look for the Euro to continue to grind lower in the current environment with a likely trading range today of 1.0760-1.0820. Prefer to sell rallies.