Fresh risk aversion and potential bull-trap increase risk of deeper fall
The Euro drops on Monday, deflated by fresh risk aversion on record number in Covid-19 cases across the Europe.
Growing fears of further slowdown in economic recovery as surge in the number of new infections triggers stricter measures and prompt investors into safety.
Bearish signal is generating after the Euro repeatedly failed to make sustained break above daily cloud top (1.1850) and Fibo 61.8% of 1.2011/1.1612), signaling formation of bull-trap.
Fresh weakness threatens larger bulls, with risk of deeper pullback seen on break of pivotal supports at 1.1800/1.1780 zone.
Investors focus on ECB’s policy meeting on Thursday, with signals of dovish stance from the central bank on rising downside risk that would add pressure on the single currency.
Res: 1.1832; 1.1850; 1.1864; 1.1880
Sup: 1.1797; 1.1783; 1.1762; 1.1746