The euro slowed its advance after April’s CPI dropped to 0.7% YoY.
The pair has met selling pressure at February’s peak at 1.2240. An overbought RSI is likely to prompt short-term players to take profit, pushing the price into a deeper correction.
The divergence is a sign of loss of momentum in the bid war. The previous supply zone near 1.2150 has turned into support where buyers may wait for a bargain.
On the upside, a bullish breakout could trigger an extended rally above 1.2300.
