Initial sign of recovery stall after 20DMA repeatedly capped
The cross dipped after repeated failure to break above falling 20DMA (0.8898), as better than expected UK GDP data (Q2 GDP y/y 1.3% vs 1.2 % f/c / prev) offset larger than expected UK current account deficit (Q2 -25.2B vs -19.5B f/c) and inflated pound.
Bearishly aligned daily techs added to limited recovery from 0.8800 zone, which showed initial signs of stall at 0.8900 zone, as momentum is turning south and stochastic is flat at overbought zone boundary.
German CPI data re in focus today, with forecast for weaker reading in Sep (y/y 1.3% f/c vs 1.4% prev) as inflation remains well below ECB’s target at 2%, expected to further soften Euro’s near -term tone.
Sideways-moving 10DMA (0.8849) offers solid support and guards more significant 200DMA (0.8832) loss of which would confirm an end of corrective phase and risk renewed attack at key 0.8800 support zone (new multi-month low / cracked Fibo 61.8% of 0.8489/0.9324).
Res: 0.8899; 0.8924; 0.8967; 0.8974
Sup: 0.8866; 0.8849; 0.8832; 0.8808