EURUSD may ease further as dollar regains traction; overall bulls favor further upside after correction
The Euro stands at the back foot at the beginning of the week and tested supports at 1.2400 zone on Monday, as dollar ticked higher against the basket of major currencies, boosted by overall solid US GDP data last Friday.
This signals a breather in larger EURUSD uptrend, with repeated failures to clear 1.25 barrier also seen as negative signal which could lead into deeper correction, as bulls show signs of fatigue.
Thursday’s bearish candle with long upper shadow which was formed after strong upside rejection at 1.2537, continues to weigh and signal further easing.
Near-term action stays capped under hourly cloud (1.2420/1.2445) keeping immediate focus at the downside and test of Friday’s low at 1.2370, break of which will unmask strong support at 1.2300 (Fibo 38.2% of 1.1915/1.2537 upleg, reinforced by rising 10SMA).
Corrective action should be ideally contained at 1.2300 zone as overall bullish structure favors further advance.
Conversely, loss of 1.2300 handle would signal deeper correction and risk test of key 1.2160 support zone (18 Jan trough / Fibo 61.8% of 1.1915/1.2537 / rising 20SMA).
Res: 1.2432; 1.2493; 1.2537; 1.2597
Sup: 1.2370; 1.2351; 1.2300; 1.2226