Recovery from last-week’s sharp fall is losing traction despite Friday’s bullish candle (the first after five straight days in red) and close above Fibo barrier at 108.07 (38.2% of 113.70/104.59 bear-leg).
The dollar was weaker across the board on Monday, following comments from Fed chief Powell, who signaled that rate hike cycle might be over, as growing signs that the US economy is losing momentum suggest that the central bank would be more cautious.
Stronger that expected US jobs data, released on Friday, provided little help to the greenback, depressed by growing negative sentiment.
Weak daily techs signal further weakness, after Thursday’s quick recovery after flash crash and Friday’s extension higher, were seen as positioning for fresh downside.
Selling upticks remains favored for test of 107.24/00 (Fibo 38.2% of Thursday’s 108.88/104.59 fall/psychological support), with break here needed to generate bearish signal for extension towards 106.50 (Fibo 61.8% of 2016 98.99/118.66 rally) and 104.60 (last Thu/26 Mar 2018 lows).
Alternative scenario requires extension and close above 110.26 (50% of 113.70/104.59) to sideline bears, while return above falling 10SMA (109.70) is needed to signal reversal.
Res: 108.60, 109.15, 108.88, 109.15
Sup: 108.02, 107.51, 107.24, 107.00
