The pair stands at the back foot on Tuesday after Monday’s action ended in long-tailed Doji after spiking to 110.75 but closing above rising 20SMA (111.31). Recovery attempts in early European trading were capped by thick hourly cloud which maintains pressure (cloud base lays at 111.37). However, chances of stronger recovery exist as yesterday’s long-tailed candle signals strong downside rejection, with momentum picking up and slow stochastic attempting to reverse from oversold zone. Repeated close above 20SMA is seen as minimum requirement for reversal scenario, with further positive signal expected on close above 111.67 (Fibo 38.2% of 113.17/110.75), while lift and close above 10SMA (112.12) would confirm reversal. Negative outlook could be expected on close below 20SMA, while break below 30SMA (110.99) and Monday’s low (110.75) would signal bearish continuation towards 55 SMA (110.46) and 200SMA (110.10).
Res: 111.37, 111.54, 111.67, 112.12
Sup: 110.99, 110.75, 110.46, 110.10
