Bulls started to lose traction on approach to key Fibo barrier
The pair eases from new marginally higher recovery high at 1.1154 in European trading on Monday as bulls face headwinds from key Fibo barrier at 1.1166 (61.8% of 1.1494/1.0635).
We already warned that bulls may slow on approach to 1.1166 on overbought daily stochastic and fading bullish momentum, with consolidation expected to hold above daily cloud top (1.1065) and maintain bullish bias.
But strong selling of EURGBP may drag the single currency lower along with possible action of central banks, which were recently buying Euro and now look to move into dollar, that may increase pressure.
Strong bullish signal that was generated on last week’s close above thick daily cloud could be offset if the price dips below cloud top (also broken 50% of 1.1494/1.0635) that would signal top and allow for deeper pullback towards former range tops / 200DMA (at 1.1000 zone).
Bulls are expected to remain in play above cloud top, however, more signals (bounce to new highs or firm break below cloud base) would be required before making decision.
Res: 1.1154; 1.1166; 1.1200; 1.1236
Sup: 1.1100; 1.1065; 1.1010; 1.0991