The Euro stands at the back foot in early European trading on Monday, ahead of release of German Ifo business climate data for June.
Two-day recovery off last week’s low at 1.1508 failed to break 20SMA (1.1674) on Friday and early Monday’s action remains capped here.
The resistance is reinforced by converged daily Tenkan-sen/Kijun-sen and also marks 50% retracement of 1.1848/1.1508 fall, marking strong obstacle, where recovery showed signs of stall.
Weakening momentum and daily 10, 20, 30 SMA’s holding in bearish setup, support negative scenario, which needs close below 5SMA (1.1611) to confirm hourly double-top and signal further weakness.
German Ifo Business climate is forecasted at 101.9 in June vs 102.2 in May and release above consensus would signal reversal after the index was down for four straight months.
Bullish scenario requires sustained break above 20SMA to signal further retracement of 1.1848/1.1508 descend and expose next pivotal barrier at 1.1718 (Fibo 61.8%).
Res: 1.1674, 1.1698, 1.1718, 1.1767
Sup: 1.1628, 1.1611, 1.1591, 1.1571
