Fresh weakness results in eventual break below 200DMA
The pair extended weakness to 1 ½ week low in early trading on Monday, as risk-off mode dominated in Asia as markets got disappointed by OPEC decision, expecting stronger action from the cartel
Fresh weakness broke below 200DMA (108.33) which contained attacks in past two days and pressuring another important support at 107.69 (Fibo 38.2% of 101.18/111.71 ascend).
Initial bearish signal could be expected on close below 200DMA, with confirmation on close below Fibo support.
Rising bearish momentum and south-heading RSI / Stochastic, support scenario, along with 10/200DMA bear-cross, which formed last week as falling thin daily cloud caps.
Break below 107.69 would open way for test of 106.91 (1 Apr low), loss of which will complete failure swing pattern on daily chart and signal further weakness.
Holiday-thinned market, on the other side, suggests that today’s action might be limited.
Ability to hold above 107.69 Fibo level would reduce downside pressure, while bounce and repeated close above 200DMA would question fresh bears.
Res: 108.23; 108.33; 108.72; 108.95
Sup: 107.79; 107.69; 106.91; 106.44