The Euro broke below psychological support at 1.1800 and hit new nearly five-month low as stronger dollar on rising US bond yields continues to drive the single currency lower and additional pressure came from slowdown in EU inflation. CPI in Eurozone slowed to 1.2% in April from 1.3% previous month, while core inflation which excludes volatile items such as food and energy, fell from 1.0% in March to 0.7% in April. Losing 1.1800 handle, the Euro became more vulnerable to further weakness, with key support at 1.1709 (Fibo 38.2% of 1.0340/1.2555 ascend came in focus). Larger bulls off 1.0340 (03 Jan 2017 low) are in corrective phase from new multi-year high at 1.2555 (2018 high), which should be ideally contained by 1.1709 support to keep broader bulls in play, however, recent strong weakness of the Euro doesn’t show signs of fatigue and may break below 1.1709 pivot and risk deeper correction of 1.0340/1.2555 rally. Below 1.1709, next strong support lays at 1.1675 (top of thick weekly Ichimoku cloud).
Res: 1.1800, 1.1822, 1.1854, 1.1899
Sup: 1.1815, 1.1776, 1.1709, 1.1675
