The Euro is consolidating above key supports at 1.1724/20 (daily cloud top / Fibo 38.2% of 1.1118/1.2092 rally) which contains three-day fall from 1.1963, high posted after Monday’s gap-lower opening.
The pair maintains negative sentiment from German election outcome and took out some important supports that weakened technical outlook.
Upside attempts above daily cloud were so far mild, as falling hourly cloud continues to weigh, but the pair may stay in extended consolidation above ascending thick daily cloud (1.1724/1.1514) which provides significant support. Also, extended daily studies suggest bears may take a breather above the cloud before bears resume.
Asian session’s recovery top at 1.1776 marks initial resistance, ahead of broken 55SMA (1.1810) and broken neckline of daily H&S pattern at 1.1851, which is seen ideally capping extended corrective upticks.
Negative techs favor further downside, with sustained break below daily cloud top (1.1724) to trigger fresh extension of current wave C (of five wave pattern from 1.2092), towards its Fibonacci expansion levels at 1.1680 (138.2%) and 1.1619 (161.8%).
German inflation data are in focus today (CPI m/m is expected to stay unchanged at 0.1% in Sep).
Res: 1.1776, 1.1810, 1.1851, 1.1875
Sup: 1.1724, 1.1680, 1.1662, 1.1619
