EUR/USD trades in quiet holiday mode; looks for fresh direction signals
The Euro holds in tight range in holiday-thinned market on Monday, remaining capped by sideways-moving 10SMA at 1.2330 (also Fibo 23.6% of 1.2476/1.2283 bear-leg).
The pair ended last week in red Doji with long upper shadow, signaling indecision, but also existing bearish pressure, following rejection of last week’s strong rally at 1.2476 and subsequent reversal which fully retraced gains.
Daily techs remain bearishly aligned as plethora of converged MA’s (10;20;30 in 1.2320/40 zone) continues to cap and 14-d momentum turned south and penetrated negative territory.
On the other side, oversold slow stochastic is turning north and may generate bullish signal on reversal, which would ease immediate downside risk.
The pair looks for a catalyst to establish in fresh direction, with bullish scenario requiring firm break above a cluster of MA’s to expose next key n/t barriers at 1.2394/1.2402 (daily cloud top / Fibo 61.8% of 1.2476/1.2283 descend) and revive bullish bias on break.
Negative scenario sees break of pivotal 1.2283/77 zone (29 Mar low / Fibo 61.8% 1.2154/1.2476, 01/27 Mar rally) as a trigger for fresh bearish acceleration towards 1.2240 higher base (20/21 Mar).
The pair is likely to remain in quiet mode on Easter Monday, with focus on Tuesday’s releases of German retail sales as well as Manufacturing PMI data from bloc’s members.
Res: 1.2340; 1.2357; 1.2402; 1.2430
Sup: 1.2310; 1.2280; 1.2240; 1.2200