Limited recovery likely to precede fresh push lower; Fed in focus

Early Tuesday’s action shows attempts to extend Monday’s bounce after a massive fall on Friday, which weakened near-term structure.
Bear-trap that was left after repeated failure to sustain break above pivotal Fibo barrier at 1.1671 (38.2% of 1.1909/1.1524 fall) weighs on near-term action, along with weakening bullish momentum on daily chart, suggesting limited recovery.
Increased demand for the US dollar on expectations that rising inflation could prompt Fed to start tightening policy earlier than expected, would add pressure on Euro and traders focus on the outcome of the central bank’s policy meeting that ends on Wednesday.
Recovery should be ideally capped by 10DMA (1.1616) to keep near-term bias with bears for renewed attack at key weekly cloud base (1.1562) and multi-week lows at 1.1525 zone, break of which is needed to signal continuation of the downtrend from 1.2266 (May top).

Res: 1.1616; 1.1632; 1.1671; 1.1692
Sup: 1.1585; 1.1562; 1.1535; 1.1525