The Euro opened with gap-lower on Monday as geopolitical tensions escalated after Russia put its fast response forces, including nuclear, on highest alert over the weekend.
Although the pair bounced after dipping to 1.1125 after Monday’s opening (close to Thursday’s low, hit after Russia launched an attack on Ukraine, but talks between Russia and Ukraine, which started today, may ease tensions and ease near-term downside pressure and allow for further recovery.
However, upticks are expected to be limited and possibly to fill today’s gap before bears regain control, as overall picture remains negative on persisting threats of further escalation that keeps traders in defense and focusing safe-havens.
Bearish daily studies support the notion as 14-d momentum continues to head south and move deeper into negative territory, while moving averages are in full bearish setup.
Initial resistance at 1.1200 zone (round-figure / Fibo 23.6% of 1.1494/1.1106 descend) is under pressure, with extended upticks to stall under pivotal barriers at 1.1250 zone (Fibo 38.2% / daily Tenkan-sen) to keep bears in play and offer better levels to re-enter downtrend for acceleration towards targets at 1.1040/1.1000 (Fibo 76.4% of 1.0635/1.2349 /psychological).
Only return and close above 1.1300 (50% retracement of 1.1494/1.1106 / daily Kijun-sen) would ease bearish pressure.
Res: 1.1200; 1.1254; 1.1280; 1.1300.
Sup: 1.1166; 1.1125; 1.1106; 1.1040.
