The Euro cracked key support at 1.1636 (triangle support line) on Thursday, in extension of bear-leg from 1.1745 (31 July spike high).
Bears extend into third straight day, with strong bearish signal being generated on Wednesday’s break and close below the base of thick daily cloud, with the sentiment being additionally weakened by hawkish stance from Fed, following two-day policy meeting.
The Fed sounded more hawkish that at the previous meeting, in upgraded view on the economy, with gradual rate increases to be consistent with sustained growth, strong labor market and inflation near 2% target.
The notion is supported by weakening daily techs as the price moved below cloud and a cluster of converged MA’s, while 14-d momentum broke into negative territory and created bear-cross with its 7-d MA.
Firm break below triangle support (1.1636) and another pivotal support at 1.1616 (Fibo 61.8% of 1.1508/1.1790 upleg) would be strong bearish signal and would risk test of 1.1574 (Fibo 76.4% and key 1.1508 support (21 June low).
Negative tone after hawkish Fed could be boosted further from Friday’s US jobs data as forecasts for increased average hourly earnings (0.3% f/c vs 0.2% prev), Unemployment 3.9% f/c vs 4.0% prev) and forecast for solid increase of new employments could be supportive factor for the greenback.
Broken cloud base (1.1646) and broken 30SMA (1.1673) mark solid resistances which are expected to cap and keep near-term bears in play.
Res: 1.1646, 1.1673, 1.1685, 1.1700
Sup: 1.1616, 1.1574, 1.1527, 1.1508
