The Euro continues to trend lower; key support at 1.0340 in focus again
The Euro holds in red for the third straight day and retraced almost 76.4% of 1.0349/1.0786 corrective leg, signaling that larger downtrend is on track to complete its short corrective phase and threatening of renewed attack at key longer term support at 1.0340 (Jan 2017 low) after previous attempt last month stalled just ticks ahead of this level.
The single currency was pressured by ECB’s policy decision which lacked more hawkish tone and disappointed traders, while stronger dollar on risk aversion and soaring US inflation, adds pressure.
Early Monday’s fresh weakness cracked a minor higher base at 1.0459 and pressuring pivotal Fibo support at 1.0452 (76.4% of 1.0349/1.0786 upleg), with break here to open way for test of 1.0349/40 (2022 low / Jan 2017 low).
Falling and thickening daily cloud continues to weigh and adds to negative signals from rising bearish momentum, although oversold stochastic suggest that bears may take a breather before final push towards 1.0349/40 targets.
Upticks are expected to offer better selling opportunities while holding below 1.0568 (daily Kijun-sen / broken 50% retracement of 1.0349/1.0786 upleg).
Res: 1.0516; 1.0568; 1.0606; 1.0619
Sup: 1.0452; 1.0400; 1.0388; 1.0349