EUR/USD has been quite impulsive with the bearish momentum since a bullish false breakout which happened above 1.1500 area. EUR was able to gain certain momentum starting the week today but could not sustain it further as the bears are currently holding the upper hand.

EUR has been weighed down by the recently published economic reports. Moreover, the BREXIT issue has not been settled yet. Ahead of European Central Bank (ECB) Meeting on Thursday, today German PPI report was published with a decrease to -0.4% from the previous value of 0.1% which was expected to be at -0.1%. Moreover, German Buba Monthly report is also going to be published today which is expected to have neutral outcome with a slight dovish bias amid the ongoing troubles in Germany and France. The ECB Press Conference with Mario Draghi is going to be held shortly after the monetary policy statement with the main refinancing rate unchanged at 0.00%. After ending the asset purchase phase in December, markets expected the ECB to raise the key policy rate in the third quarter of 2019. However, in light of downbeat data monetary tightening it may be delayed until the 4th quarter of 2019 or later.

Additionally, the Bank of Italy cut its growth forecast this year from 1.0% to 0.6% and from 1.1% to 0.9%. According to the eurozone's Economic Bulletin, Italy's economy and the overall eurozone's economy is losing momentum that is certainly bearish for EUR in the medium term. Italy's economy shrank at the end of 2018 which nudged the country into recession, but the government is making efforts to spur the domestic economy.

On the other hand, due to observance of Martin King Luther Day in the US, the economic calendar lacks data from the US. Thus, USD is trading steadily versus EUR. This week, USD gains are likely to be capped as upcoming economic reports are expected to reveal weak figures. Tomorrow Existing Homes Sales report is going to be published which is expected to decrease to 5.27M from the previous figure of 5.32M. Despite the government shutdown for over 28 days in a row, certain USD gains indicate strength of the US currency which is set to dominate EUR further this year, if everything sits in its places soon.

Meanwhile, this week is expected to be quite corrective and volatile as investors are still indecisive about the ECB policy update. On the other hand, the lacl of macroeconomic reports or events from the US could inject impulsiveness in the market, thus causing uncertainty. Though EUR is weaker than USD currently, any positive outcome from the ECB press conference can lead to an impulsive counter-move.

Now let us look at the technical view. The price is hovering below 1.1450-1.1500 resistance area as well as being held by the dynamic level of 20 EMA as resistance on the daily close. The price managed to push higher today but with worse economic results, the bears are back in the market and expected to lead the price much lower towards 1.1200-50 support area in the coming days. As the price remains below 1.1500 area with a daily close, the bearish bias is expected to continue.

SUPPORT: 1.1200-50, 1.1300

RESISTANCE: 1.1450, 1.1500

BIAS: BEARISH

MOMENTUM: IMPULSIVE and VOLATILE