The Euro regained traction in early European trading and bounced through broken converging 10/20SMA’s (1.1365), after Friday’s low at 1.1327 proved as solid support and contained renewed attack.
Fresh recovery attempts so far retraced over 50% of Friday’s 1.1421/1.1327 fall and unaffected by weaker than expected German Ifo data, as Business climate index fell to 102 in nov, undershooting forecast at 102.30.
This could add to negative signals from last Friday’s weaker than expected German / EU PMI data that push the Euro lower.
Comments from ECB’s Praet, who did not say something substantially different from encouraging signals on underlying strength of bloc’s economy which supports expectations that inflation would rise towards projected levels, but signaling that rate hikes are still on hold as significant stimulus is still needed, kept the single currency at the front foot.
Focus turns towards ECB President Draghi’s speech at the EU parliament, as markets would look for fresh hints about possible rate hikes.
Improving near-term techs support, but mixed signals still come from daily studies, as momentum ticked higher but MA’s stay in mixed setup.
Close above falling 30SMA (1.1393) which repeatedly capped the action in past two days, would generate bullish signal and open way for further recovery.
Last week’s high at 1.1433 and cracked Fibo barrier at 1.1444 mark pivotal resistances, violation of which could accelerate towards key barriers at 1.1472/1.1500 (20 / 07 Nov highs).
Conversely, repeated failure to clearly break above falling 30SMA would keep the downside vulnerable, with bearish signal expected on close below Fri / today’s lows at 1.1327/26.
Res: 1.1393, 1.1421, 1.1433, 1.1444
Sup: 1.1365, 1.1326, 1.1313, 1.1276
