Completion of reversal pattern on daily chart fuels further weakness
The cross accelerates further down on Tuesday after Monday’s 1% drop (the biggest one-day fall since 1 Aug 2019) completed Doji reversal pattern on daily chart.
Increased demand for safe-haven yen ahead of Fed and overbought Euro vs dollar drive the pair lower.
Fresh weakness (0.84% down since Asian opening today) took out initial support at 122.06 (Fibo 23.6% of 114.41/124.42) and pressuring rising 10DMA (121.21), break of which would open way for test of key Fibo support at 120.60 (38.2% of 114.41/124.42 / top of rising 4-hr cloud).
Violation of 120.60 pivot is needed to confirm reversal and expose 200DMA / 50% retracement (119.42).
South-heading daily momentum / stochastic and 4-hr studies in bearish mode add to negative signals.
Res: 122.06; 122.60; 123.51; 123.93
Sup: 121.21; 121.00; 120.60; 120.24