Euro loses traction after weaker than expected German Ifo data
The Euro fell to the session low in European trading on Monday, down over 40 pips, deflated by weaker than expected German Ifo data, which dropped to the lowest since April in October.
Fresh weakness hit the floor of multi-day congestion (1.1620) increasing risk of reversal after recovery from 1.1524 low was repeatedly rejected under key Fibo barrier at 1.1671 (38.2% of 1.1909/1.1524 fall).
Mixed daily studies (10/20DMA bull-cross / momentum still in positive territory conflict falling 30/55DMA’s / RSI and stochastic heading south) lack clear direction signal for now.
Close below 1.1620 would generate initial negative signal which would require confirmation on return and close below 20DMA (1.1599) that would increase risk of retesting key support at 1.1562 (weekly cloud base).
On the other side, eventual close above falling 30DMA (1.1646) which capped the action during the last week, would ease downside risk, but sustained break of 1.1671 Fibo level would signal bullish continuation.
Traders eye ECB meeting on Thursday, expecting more hawkish tones from the central bank regarding the possibilities of tapering start and possible earlier than expected rate hike.
Res: 1.1646; 1.1671; 1.1707; 1.1716
Sup: 1.1615; 1.1599; 1.1571; 1.1562