The downside will remain vulnerable while recovery stays capped by strong 1.10 resistance zone
The Euro ticked lower in early European trading on Monday, as upside attempts remain capped at strong 1.1000 resistance zone (falling 20DMA / 50% retracement of 1.1109/1.0878 / bear-trendline off 1.1412 high), keeping larger downtrend intact.
Daily studies show rising bearish moment and stochastic turning south at overbought border line that supports negative scenario.
Solid US jobs data keep the dollar underpinned, however, continuation of US/China trade talks this week would provide fresh signals.
Data released this morning showed stronger than expected fall in German factory orders (Aug -0.6% vs -0.3% f/c) adds to negative signals that the largest EU economy is heading towards recession.
Pivotal supports lay at 1.0960/50 zone (bull-trendline off 1.0878 low / 10DMA / Fibo 38.2% of 1.0878/1.0999) and break here would spark fresh weakness and confirm double-top (1.0998/99).
Conversely, bullish signal can be expected on firm break above 1.10 zone, which capped last week’s action twice, with confirmation of extension of recovery leg from 1.0878 (1 Oct low), seen on break above 1.1021 (Fibo 61.8% of 1.1109/1.0878).
Res: 1.0992; 1.0999; 1.1005; 1.1021
Sup: 1.0961; 1.0951; 1.0924; 1.0904