The euro is still keeping softer on the week

EUR/USD H1 06-05

The legal complications from the German ECB court ruling yesterday is leaving a bitter taste in the mouths of investors, as we continue to see tensions build after the ECB response:

The Governing Council received a preliminary briefing by the governor of the Bundesbank and by the legal department of the European Central Bank (ECB). The ECB takes note of today's judgment by the German Federal Constitutional Court regarding the Public Sector Purchase Programme (PSPP).The Governing Council remains fully committed to doing everything necessary within its mandate to ensure that inflation rises to levels consistent with its medium-term aim and that the monetary policy action taken in pursuit of the objective of maintaining price stability is transmitted to all parts of the economy and to all jurisdictions of the euro area.The Court of Justice of the European Union ruled in December 2018 that the ECB is acting within its price stability mandate.

The ECB basically said we will continue to do what we have been doing since the rulings set out by the ECJ is all that matters to the central bank.

In any case, back to the EUR/USD chart. The near-term bias in the pair is keeping more bearish as we see price action sit below the key hourly moving averages.

There was a slight retracement higher in overnight trading as the dollar softened but that was met by resistance around 1.0885 before falling back under the 200-hour MA (blue line).

There is some mild support around 1.0811 next but the key level to watch will be the 1.0800 handle. A break below that will put the focus back on support from the daily chart around 1.0769 with the 24 April low @ 1.0727 a key level to watch as well.