Strong bearish acceleration in European session on Friday was sparked by downbeat PMI data of the eurozone the biggest bloc’s economies that pointed to the slowdown of recovery in August. The data soured risk sentiment, sending the single currency lower, raising risk of deeper correction before bulls finally attack 1.20 barrier. Today’s break below converging 10/20DMA’s added to bearish signals from weakening momentum and south-heading stochastic and RSI on daily chart. Bears focus monthly cloud base (1.1739) and a higher base at 1.1700 zone, violation of which would risk further weakness. Long upper shadows on weekly candles and first weekly close in red after eight straight bullish weeks, as well as bull-trap above 100MMA that is forming on monthly chart, point to strong headwinds bulls face from 1.20 barrier and add to negative signals.
Res: 1.1808; 1.1820; 1.1855; 1.1882
Sup: 1.1760; 1.1711; 1.1695; 1.1660
