Bear-trap and hammer generate initial reversal signals but downside is still at risk
The cross remains in green for the second straight day and returns above 200DMA (0.8836) in attempts to create bullish signal and spark reversal.
Friday’s hammer candle and bear-trap at pivotal Fibo support at 0.8808 (61.8% of 0.8489/0.9324 ascend) support scenario, along with stochastic’s bullish divergence and reversal from oversold territory.
Break above pivotal resistances at 0.0.8871 (falling 10DMA) and 0.8893 (19 Sep spike high) is needed to confirm and signal further recovery.
On the other side, two-day long break below 200DMA and overall bearish structure with strong negative momentum, weigh and would keep the downside at risk, as long as consolidation holds below 0.8871/93 upper pivots.
Bearish scenario would require repeated close below 200DMA and firm break below 0.8808 Fibo support to signal bearish continuation.
Res: 0.8855; 0.8872; 0.8893; 0.8948
Sup: 0.8836; 0.8815; 0.8808; 0.8792