Bears are taking a breather above key supports and expected to remain in play while holding below 20DMA
Fresh bears are pausing in early Friday’s trading after two-day fall faced headwinds on approach to key Fibo support at 1.1175, but consolidation is so far narrow.
Daily techs remain weak as the price stays below 10/20DMA’s which formed bear-cross on Thursday and 14-d momentum is in the negative territory.
The single currency is pressured by firm dollar on growing fears over increased numbers of new corona virus cases.
Wednesday’s bearish engulfing and Thursday’s red daily candle weigh on near-term price action, keeping pivotal supports at 1.1175/68 at risk.
The notion is supported by multiple upside rejections on weekly chart which shows four consecutive weekly candles with very long upper shadows and formation of bull-trap above 200WMA.
Violation of 1.1175/68 would spark stronger acceleration lower and open way for further retracement of 1.0774/1.1422 bull-leg.
Only today’s close above 20DMA (1.1259) would sideline bears and generate positive signal on formation of bullish engulfing pattern.
Situation over the virus and economic recovery remain key drivers, with US data due later today to possibly give fresh signals.
Res: 1.1247; 1.1259; 1.1300; 1.1325
Sup: 1.1204; 1.1175; 1.1163; 1.1098