The Euro stands at the front foot and attacks again double-Fibo barrier at 1.1423 (23.6% of 1.1815/1.1302 and 38.2% of 1.1621/1.1302), after triple failure to close above here. Monday’s bullish outside day, along with strong downside rejection, is bullish signal, supported by north-heading 14-d momentum and formation of 5/10SMA bull-cross. But on the other side, strong upside rejection on Friday weighs, accompanied flat RSI / slow stochastic and pressured by falling 20SMA (1.1451) partially offsets positive signals. The single currency is looking for a catalyst which would provide direction signal, with focus on economic indicators. German factory orders rose well above expectations in Sep, with focus on series of services PMI data from the EU, which could provide fresh signals. Negative releases would confirm existing bearish bias following multiple failures at 1.1423 and Friday’s bull-trap pattern that could attract fresh weakness. Return below Monday’s low at 1.1353 would further weaken near-term structure and risk retest of key 1.13 supports. Bullish scenario requires sustained break above 1.1423 Fibo barrier and falling 20SMA to generate stronger signal for extension of recovery from 1.1302 (31 Oct low). US midterm election, due later today, is also in focus for fresh signals. The dollar could strengthen if Republicans win in both chambers – the House of Representatives and the Senate, but wide expectations for split results, where Democrats would win control of the House of representatives while Republicans would keep the Senate.
Res: 1.1423, 1.1452, 1.1461, 1.1498
Sup: 1.1399, 1.1386, 1.1353, 1.1335
