The pair holds firmly in red for the fifth straight day and broke through strong supports at 1.1558/45 (50% of 1.1300/1.1815 rally/daily cloud top on fresh bearish acceleration in early Monday’s trading.
The dollar strengthened across the board after US, Canada and Mexico reached trade deal over the weekend and remains supported by concerns about US/China trade conflict, as well as hawkish stance of the Fed, which signals steady rate increases next year.
On the other side, the single currency was additionally pressured on concerns about Italy’s budget deficit.
Fresh bears on Monday cracked key support at 1.1526 (10 Sep trough), with strong bearish signal expected on daily close below here. Firm break lower would open next pivots at 1.1511/1.1497 (daily cloud base/Fibo 61.8% of 1.1300/1.1815), break of which is needed to confirm reversal.
Euro’s negative sentiments is boosted by bearish techs, as growing bearish momentum and daily MA’s in full bearish setup, favor further weakness. Also, fresh weakness returned below thick weekly cloud, which now weighs and maintains negative tone.
Deeply oversold slow stochastic suggests bears may take a breather, but so far lacking firmer signals.
Corrective upticks should stay under broken 55SMA (1.1612) to keep bearish bias intact.
Res: 1.1558, 1.1580, 1.1612, 1.1624
Sup: 1.1511, 1.1497, 1.1480, 1.1422
