The Euro managed to rebound off its lows by 0.33% to 1.0878 from 1.0828 yesterday, thanks to the broad-based US Dollar fall. The shared currency traded to 1.08856 highs overnight, falling just short of 1.0900 once again. EUR/USD had an overnight low of 1.0818 before its rebound against the Greenback. The currency gets its big test today with the double whammy of the Eurozone’s Q1 GDP followed by the ECB policy rate meeting decision and press conference.
Europe’s Q1 GDP is forecast to contract by -3.7% from the previous quarter’s 0.1% gain. BK Asset Management’s Managing Director Kathy Lien points out that “Europe entered its lockdown in mid-February, 3 weeks before major US states so the economic toll will be more significant.” Lien has a very valid point. The ECB meeting will also impact the shared currency. While the ECB is not expected to change policy, President Christine Lagarde and her colleagues will remain dovish.
Bear in mind that the speculative market positioning is long Euro bets to their biggest since June 2018. EUR/USD has immediate resistance at 1.0900 followed by 1.0940. Immediate support can be found at 1.0840 followed by 1.0810 and 1.0780. Look for a likely trading range today between 1.08 and 1.09. Prefer to sell rallies.