Bears take a breather after strong fall previous week
The Euro moves higher on Monday, as traders book some profits from last week’s fall, with corrective action also being signaled by daily stochastics’ reversal in oversold territory.
Strong bearish signals were generated on Friday’s close below 1.1211/1.1199 pivots (Fibo 38.2% of 1.0870/1.1422 / 20DMA) and second consecutive weekly close in red after bull were trapped above 200WMA.
Momentum on daily chart is weak and suggests limited upside action, with upticks to be ideally capped by falling 10DMA (1.1270) before bears regain control.
Repeated close below 1.1211 Fibo level is needed to signal bearish continuation and expose support at 1.1105 (30DMA), followed by more significant 1.1081 (Fibo 61.8% of 1.0870/1.1422) and 1.1065 (daily cloud top).
Only close above 10DMA (also near Fibo 38.2% of 1.1422/1.1168 pullback) would sideline bears and generate initial reversal signal.
Res: 1.1254; 1.1270; 1.1295; 1.1325
Sup: 1.1199; 1.1168; 1.1146; 1.1105