EURUSD dipped to new two month low early Tuesday, remaining under pressure from risk aversion on China’s latest stimulus news and wide expectations of ECB rate cut by 25 basis points on Thursday.
After registering a daily close below 1.0944/35 (Fibo 61.8% of 1.0775/1.1214 / daily cloud base / 100DMA) bears now pressure pivots at 1.0880/73 (Fibo 76.4% / 200DMA).
Technical picture on daily chart remains weak as negative momentum is strong and MA’s created a number of bear crosses however, stretched momentum studies and stochastic entering oversold territory, may slow the pace of current price action and make attempts through 200DMA more difficult.
Bears are expected to remain in play while holding below daily cloud base / 100DMA, with firm break of 1.0880/73 to open way towards early Aug higher base at 1.0781.
Economic data released today showed that inflation in Spain and France remains in a downward trajectory, while focus shifts on German / EU ZEW economic sentiment, with quite optimistic forecasts for October (German ZEW Oct 10.2 f/c vs Sep 3.6 / EU Oct 16.9 f/c vs Sep 9.3) which may ease bearish pressure on the single currency, if data come at or above expectations.
Res: 1.0910; 1.0944; 1.0980; 1.1000.
Sup: 1.0873; 1.0781; 1.0710; 1.0666.
