Monday’s hammer and bear-trap point to reversal

The Euro rebounds on Tuesday, advancing nearly 0.5% since opening, lifted by revived risk sentiment in the market.
Upbeat German ZEW data added to hopes of faster recovery of Europe’s largest economy and further boosted the single currency.
Daily chart shows that pullback from new 2021 high (1.2943) stalled, leaving a hammer candle on Monday, with Tuesday’s acceleration higher, forming reversal pattern.
Bears also failed to clearly break key Fibo support at 1.2064 (38.2% of 1.1602/1.2349 rally) and point to bear-trap below this level that would add to positive signals.
Rising and thickening daily Ichimoku cloud underpins the recovery which sees a minimum requirement on daily close above 1.2132 (Fibo 23.6% of 1.2349/1.2053 pullback) to generate initial reversal signal and expose next pivotal barriers at 1.2166/75 (Fibo 38.2% / 10DMA), break of which would confirm reversal.
Daily techs start to improve as bearish momentum is fading and stochastic turns north in attempts to emerge from negative territory.
Fibo support at 1.2064 remains key support and potential break here would result in fresh weakness towards next pivotal support at 1.20 (psychological / daily cloud top).
Release of results of Italy Senate confidence vote in PM Conte’s government is due later today and one of key events for Euro today.
The single currency may advance if Conte wins that would signal an end of political crisis, but may come under increased pressure if Conte loses.

Res: 1.2137; 1.2166; 1.2175; 1.2201
Sup: 1.2100; 1.2073; 1.2064; 1.2046