Euro remains in red and eyes key supports ahead of important US data
The Euro extends weakness on Thursday, remaining under pressure on fading risk sentiment over fears of slowdown in recovery process that prompted traders into haven dollar.
Negative signal was generated on Wednesday, following 0.5% daily fall that formed bearish engulfing pattern on daily chart.
Negative momentum and 10/20 DMA’s in bearish setup add pressure on the pair and turn focus towards key supports at 1.1174 (Fibo 38.2% of 1.0774/1.1422) and 1.1168 (22 June trough).
Break of these levels would generate strong bearish signal on completion of two patterns: double-top (16/23 June highs) and failure swing that may spark stronger bearish acceleration.
Descending and thickening daily cloud (1.1246/1.1304) weighs and expected to keep bears in play while the price remains below the cloud as nearby converged 10/20DMA’s (1.1250) reinforce resistance.
Investors focus on important US data today (jobless claims, GDP, durables) which may further sour risk sentiment on weak figures.
Markets expect the number of people filling for unemployment benefits to remain high (1.3M f/c vs 1.5M previous week) and continued claims to probe for the first time below 20M (19.96M f/c), while the GDP is expected to drop 5% in Q1, following 2.1% increase in previous quarter.
Res: 1.1250; 1.1269; 1.1300; 1.1325
Sup: 1.1217; 1.1200; 1.1175; 1.1150