The Euro is at the back foot in early Monday’s trading and is holding around daily cloud base at 1.0557, following strong bearish acceleration and close below converged 10/55SMA’s after last Friday’s strong upside rejection.
Daily 55SMA (currently at 1.0587) marks strong barrier (10/55SMA bear cross is forming here) and capped the action in past five days.
Firm break below daily cloud base would generate stronger bearish signal, with completion of H&S pattern that is forming on hourly chart (neckline lies at 1.0545), needed to confirm resumption of fresh weakness from 1.0617 upside rejection (Friday’s high) and look for return to 1.0492 (22 Feb low).
Bearishly aligned daily studies support scenario.
Conversely, break and close above 10/55SMA’s would signal fresh strength and focus 20 SMA barrier at 1.0649.
Res: 1.0587, 1.0649, 1.0678, 1.0694
Sup: 1.0557, 1.0545, 1.0522, 1.0492
