The Euro eases on Wednesday after three-day recovery leg from five-year low at 1.0349 showed signs of stall and was capped by falling 20DMA.
Rebound was fueled by profit-taking on improved sentiment and expectations for more ECB rate hikes, in attempts to catch up with Fed, however, initial optimism was deflated on concerns that the eurozone will not be able follow Fed in fighting soaring inflation and avoid recession scenario.
Technical studies have improved on daily chart and remain partially supportive for further recovery, as 14-d momentum rose into positive territory, while broken 10DMA (1.0497) reverted to support and underpins the action.
Near-term bias is expected to remain bullish while 10DMA holds, but bulls see break of 20DMA as minimum requirement, with rise above 1.0649 (May 5 lower top / daily Kijun-sen) to confirm recovery extension.
Caution on break and close below 10DMA that would weaken near-term structure and further weakness.
Res: 1.0560; 1.0598; 1.0641; 1.0668
Sup: 1.0497; 1.0458; 1.0428; 1.0388
