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Will euro head towards 1.10 handle?

Monday, Jan 19 2015
Euro is being traded in a tighter range this morning as there is no major data releases from Eurozone. Traders are also being cautious at the beginning of the week ahead of ECB Meeting this Thursday.
 
Recent data is showing that Eurozone is far from exiting recession, with growth mostly coming from Germany, while Spain, Italy and France are still struggling with slow economic growth and high unemployment rate. ECB is expected to begin with QE programme this week, six years after Fed, and at the moment when Fed has left this programme. This move is supported by fall of inflation into deflation area, this month to -0.2%.
 
Furthermore, last week, EU Justice Court decided that OMT programme is legal giving ECB green light for future moves. What indicates that we could be see this ECB move is last week's SNB decision to discontinue minimum exchange rate of 1.20 CHF per euro. It seems that SNB is expecting from ECB to introduce new monetary measures, which would further weaken euro. 
 
If we take a look at long-term chart we can see that next major support area for euro is around 1.10 handle, and this would be our selling target, as we do not see any huge uptrend as a likely scenario in the near future.
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