Double long-legged Doji candles of past two days signal that bear-leg from 1.1020 peak may be losing traction, as fall was contained by rising 20SMA at 1.0838, which underpins today’s action after forming bull-cross with 200SMA.
Another supportive factor could be reversal of slow stochastic from oversold zone, however, recovery attempts were so far capped by hourly cloud base (cloud is spanned between 1.0870 and 1.0892).
The pair needs to break above 10SMA (currently at 1.0906) to signal stronger recovery and sideline existing downside risk.
Otherwise, fresh attempts lower could be expected after consolidation, with extension below 200SMA (1.0824) to threaten of filling the gap of 24 Apr and open way for further downside.
The pair on track for weekly close in red and forming weekly bearish engulfing pattern that is seen as strong bearish signal.
Res: 1.0870, 1.0892, 1.0906, 1.0932
Sup: 1.0852, 1.0838, 1.0824, 1.0794
