Bearish engulfing on Tuesday but 200SMA holds pullback for now
The Euro is standing at the back foot in early Wednesday’s trading, following Tuesday’s close in red, which formed bearish outside day.
Four-day rally repeatedly failed at 1.1400 barrier, as massive weekly cloud weighs heavily (cloud base lays at 1.1436) and subsequent easing was triggered by lowered tone from Fed, which reduced expectations for aggressive rate cut, saying that 0.5% cut would be overdone.
Falling 200SMA (1.1347) contained Tuesday’s pullback, preventing deeper correction for now, however, daily techs show momentum heading south and stochastic about to reverse from overbought territory.
Fresh bears need clear break below 200SMA to regain control and extend pullback towards next pivot at 1.1324 (Fibo 38.2% of 1.1181/1.1412 upleg).
Conversely, bulls will remain in play while 200SMA holds, with extended consolidation expected to precede renewed attempts through psychological 1.1400 barrier.
Res: 1.1393; 1.1404; 1.1412; 1.1436
Sup: 1.1347; 1.1324; 1.1296; 1.1279