Risk-off mode is on hold but lack of stronger direction signals is evident
The pair is holding well above 106 handle which was cracked in early Asian trading on quick dip to 105.91, as firmer dollar in Europe on Monday, offsets risk-off signals on fresh taxes that US and China imposed to each other during the weekend.
Positive signals were generated by bullish engulfing pattern on weekly chart, as well as north-heading indicators, however, warning of fresh recovery stall comes from south-heading daily momentum which broke into negative territory and overbought stochastic which turned sideways, threatening of reversal.
Near-term outlook is unclear and looks for stronger signals, with bullish scenario seen on firm break of 106.70/90 zone (recent upside rejections / falling 30DMA / 50% retracement of 109.31/104.44 fall).
Conversely, sustained break below pivotal support at 105.82 (Fibo 38.2% of 104.44/106.68 / 29 Aug spike low) would generate negative signal and shift near-term focus lower.
Res: 106.54; 106.68; 106.76; 106.97
Sup: 106.15; 105.91; 105.82; 105.56