Bears on hold after Thursday’s long-legged Doji
The Euro holds in directionless mode in early Friday’s trading after previous day’s action ended in long-legged Doji, which signaled strong indecision of past two-day bearish action.
Thursday’s dip was contained by Fibo 76.4% of 1.1508/1.1790 (1.1574) but also failed to close below cracked Fibo 61.8% (1.1616), suggesting that bears may be running out of steam.
Fresh bullish momentum supports today’s action, together with bullish divergence on daily chart slow stochastic, which could keep the downside protected for the time being.
Recovery needs extension above falling 10SMA (1.1681) to sideline downside risk and open way towards key near-term barrier, provided by falling 55SMA (1.1710).
Bearish scenario requires close below Fibo 61.8% (1.1616) to weaken near-term structure for retest of Thursday’s spike low at 1.1574, break of which would signal continuation of bear-phase from 1.1790 towards key support at 1.1508 (1.1508).
Res: 1.1681; 1.1710; 1.1744; 1.1790
Sup: 1.1616; 1.1574; 1.1527; 1.1508