Recovery attempts to extend on easing risk-off mode but overall picture remains bearish
The Euro remains firm and holding near recovery high at 1.0871 (Monday’s high) inflated by lowered concerns about coronavirus pandemic risk that revived demand for riskier assets.
Monday’s repeated close above 10DMA was initial bullish signal with fresh probe above broken Fibo level at 1.0863 (76.4% of 1.0340/1.2555) looking for further signal on eventual break and close above, after double failure (Fri/Mon).
Rising daily momentum supports the advance, however, larger picture remains bearish and risk of recovery stall is still high.
Repeated failure to close above 1.0863 Fibo level would keep the downside vulnerable, with persisting fears of spreading coronavirus through Europe (after Italy was hit) adding to signs that recovery might be short-lived and fresh risk aversion would hit the single currency.
Pivotal barriers at 1.0900/15 (Fibo 38.2% of 1.1095/1.0778 bear-leg / falling 20DMA) need to cap extended upticks and keep bears in play, while break here would signal reversal and neutralize downside risk.
Res: 1.0871; 1.0899; 1.0915; 1.0936
Sup: 1.0845; 1.0831; 1.0805; 1.0778