The Euro stands at the back foot in early European trading on Friday and reverses gains of the previous day, when weaker than expected US retail sales (data showed the biggest drop in more than nine years) pressured dollar.
The greenback regained traction after weaker than expected Chinese inflation data, released overnight, reiterated concerns about global growth.
Choppy trading in past few sessions suggests that larger bears hesitate on approach to key support at 1.1215 (12/13 Nov lows, the lowest since Jun 2017).
Bearish daily studies favor further weakness, with confirmation of negative stance expected on weekly close below 200WMA, which kept the downside protected since Nov 2017.
The pair is also on track for the second bearish weekly close that adds to negative outlook.
Violation of Thursday’s low at 1.1249 would open way towards 1.1215 pivot and would risk extension towards 1.1186 (Fibo 61.8% of 1.0340/1.2555, Jan 2017/Feb 2018 rally).
Only break above 1.1329/41 (falling 10SMA / Wed’s high) would sideline bears and allow for stronger correction.
Res: 1.1296, 1.1329, 1.1341, 1.1366
Sup: 1.1268, 1.1249, 1.1215, 1.1186
