Bearish tone to prevail below pivotal 1.0270 Fibo barrier
The Euro reduced speed on Thursday after post-Fed 0.83% jump and still holding below pivotal Fibo barrier at 1.0270 (38.2% of 1.0786/0.9952 descend) where bulls were trapped last week.
Support from unclear signals about the size of Fed’s rate hikes in coming policy meetings that disappointed many and deflated dollar, is likely to be short-lived.
The Euro remains very vulnerable to weak economic data from the EU and growing concerns about gas supply shortage that may limit the recovery.
Unless the action makes a clear break above 1.0270 pivot that would improve near-term structure and spark further advance, the downside is likely to remain at risk, with loss of 1.0100 zone trough (July 26/27 lows) to open way for fresh attack at parity level and retest of 20-year low at 0.9952 (July 14).
Daily studies remain bearishly aligned overall, though momentum has strengthened and probing into positive territory, but risk is expected to remain skewed to the downside as long as action holds below 1.0270.
Slightly better than expected German CPI data and hints that inflation may have peaked, with focus on US GDP data, due later today, which is expected to provide fresh signal.
Res: 1.0234; 1.0270; 1.0293; 1.0349
Sup: 1.0185; 1.0149; 1.0096; 1.0000