EURUSD – correction to precede fresh downside
The Euro rose in early Monday’s trading after Friday’s action ended in long-tailed Doji, generating initial signal of near-term downtrend stall.
Recovery attempts were so far limited under 1.1800 handle (top of falling hourly cloud) however, improved hourly studies suggest further correction of 1.1940/1.1730 bear-leg.
Strong resistance zone between 1.1810/35 (Fibo 38.2% of 1.1940/1.1730 / daily cloud top, reinforced by Tenkan-sen) is expected to cap as downtrend is still intact on daily chart and correction is expected to precede final push towards targets at 1.1716/09 (daily cloud base / Fibo 61.8% of 1.1553/1.1961 ascend).
Near-term action is supported at 1.1760 (converged 30/55 SMA’s) which guards Friday’s spike low (1.1730).
Falling hourly cloud top (currently at 1.1790) marks initial barrier, guarding strong resistance zone above 1.1800.
Bullish scenario requires firm break above daily cloud to signal higher low at 1.1730 and open way for stronger correction.
Res: 1.1790; 1.1810; 1.1835; 1.1860
Sup: 1.1760; 1.1730; 1.1716; 1.1709