EURUSD trading at 1.1212 in narrow trading range, having hit the high during Asian session at 1.1224, while the low, was also during the Asian session at 1.1207.
The pair broke below the support at 1.1248 the 100 day moving average on Friday and bears took control. As I wrote on Friday “A break below the 1.1248 mark will attract offers targeting 1.12 zone”, that is the case for now amid general USD strength and rising rumors of a government crisis in Italy that might lead to snap elections. Traders have to avoid now long positions as the political drama in Italy resurfaces. On Friday Angela Merkel warned that the German economy is in a difficult phase with slower growth, and the weaker economic conditions give us reason to try and stimulate the domestic economy. The Economic slowdown is largely due to uncertainty in global trade and she hopes that China and USA can make progress in trade talks.
I don’t expect any significant move before the ECB decision on Wednesday. Intraday traders can play between the daily high and low. A short position targeting the 1.12 mark with a stop loss order at 1.1230 is something that day traders can try. A long position might be initiated if the pair manages to climb above 1.1236. A narrow stop loss to 1.1216 must also be placed for reducing the downside risk.Don’t miss a beat! Follow us on Twitter.