The Euro is standing at the back foot in early Friday’s trading and probes again below 1.1200 handle, after ECB stayed unchanged on Thursday and chief Mario Draghi did not say anything new in his press conference that markets understood as dovish tone.
The pair is probing through sideways-moving daily Tenkan-sen (1.1197) and rising 20SMA (1.1191), clear break of which would generate stronger bearish signal for deeper pullback from fresh high at 1.1285.
Overall bulls may be hurt by such action, as ECB is unlikely to take any action in tightening in the near future while the Fed is widely expected to hike rates in FOMC next week’s meeting that may further weigh on Euro’s bulls.
However, current easing could be described as correction which should find ground at strong 1.1114/09 support zone (Fibo 38.2% of 1.0839/1.1285 upleg/30 May trough).
Otherwise, strong reversal signal could be expected on break below 1.1109 and extension towards psychological 1.1000 support seen as likely scenario. Broken 10SMA (1.1228) now acts as resistance which capped Asian trading, with close above here needed to sideline increasing downside risk.
Res: 1.1228, 1.1269, 1.1285, 1.1300
Sup: 1.1180, 1.1114, 1.1109, 1.1062
