The Euro continued its corrective grind lower following reports of a rise in new Covid-19 cases in Germany and Portugal. EUR/USD closed 0.36% weaker to 1.1210 from 1.1240 yesterday. The shared currency is down 1% since Monday (1.1330). Traders were also questioning whether the European Union would be able to pass an ambitious stimulus plan proposed to the European Commission with some countries opposed to handing out such grants.
We highlighted earlier this week the net speculative long Euro bets were at their biggest since May 2018 (+EUR 95,649 contracts). That number has been growing steadily since the start of this month. The current market positioning will continue to weigh on the shared currency.
EUR/USD has immediate support at 1.1200 followed by 1.1170, which is strong. A break of 1.1170 would see 1.1130 and 1.1100. Immediate resistance can be found at 1.1240 and 1.1270. Look for consolidation today with a likely range of 1.1170-1.1240. Prefer to sell rallies.