Directionless near-term action looks for fresh signal; ECB and EU GDP data eyed
The Euro holds in tight range in early hours of the European session, showing no clear direction after Monday’s trading ended in long-legged Doji, signaling strong indecision.
Three-day recovery from 1.2154 (01 Mar low) faced strong headwinds at 1.2350 zone, where 30SMA and the mid-point of 1.2555/1.2154 downleg continue to cap the advance.
Repeated probes above 30SMa were so far unsuccessful, with fears reversal after repeated upside rejections remaining in play.
Fresh bearish momentum is building on daily chart and along with overbought slow stochastic, keeping the downside vulnerable.
On the other side, thickening daily cloud continues to underpin after Monday’s dip was contained by cloud top which currently lies at 1.2264.
The pair is in near-term directionless mode and looking for a catalyst for fresh direction. Releases of EU Q4 GDP on Wednesday and ECB rate decision on Thursday are focused for stronger signals.
Firm break above 30SMA is needed to generate fresh bullish signal for continuation of recovery leg from 1.2154 towards next strong barrier at 1.2400 (Fibo 61.8% of 1.2555/1.2154 downleg.
Conversely, initial bearish signal could be expected on break below 20SMA (1.2320) with extension through daily cloud top needed to generate stronger bearish signal and shift near-term focus lower.
Res: 1.2350; 1.2364; 1.2400; 1.2435
Sup: 1.2320; 1.2307; 1.2291; 1.2264