Consolidation under 1.12 barrier to precede fresh attack at key 1.11 support zone
The Euro is holding within narrow range above new 2019 low in early Friday’s trading, after Thursday’s post-ECB roller-coaster action ended in long-legged Doji candle, signaling strong indecision at key 1.11 support zone.
The ECB kept interest rates unchanged and Mario Draghi sounded less dovish that some market participants expected, preventing larger bears to eventually break below 1.11 pivot.
The European central bank didn’t want to rush with cutting rates and joining global easing trend, but looking for the outcome of Fed policy meeting next week and awaiting more news from US/China trade talks.
Technical outlook remains negative despite Thursday’s wide range and Doji candle, as underlying bear-trend stays intact and daily / weekly techs are in negative setup.
Extended consolidation within 1.1100/1.1200 range can be anticipated before fresh push lower, with firm break below 1.11 zone, expected to open way towards psychological 1.10 support.
Former consolidation lows and broken H&S pattern neckline at 1.12 zone are reinforced by falling 10SMA and mark solid barrier, which is expected to cap consolidation and keep larger bears in play.
Key event today is release of US GDP data, which are expected to show US growth slowed in Q2 to 1.8% from 3.1% in Q1, which may increase pressure on dollar, however, traders will look for the outcome of Q2 consumer spending for more evidence about the strength of the economy.
Res: 1.1150; 1.1181; 1.1200; 1.1223
Sup: 1.1126; 1.1101; 1.1050; 1.1019