The Euro lost traction on Tuesday and fell to 2 ½ month low, after Monday’s recovery attempts proved to be just a mild consolidation.
Renewed risk aversion and series of weaker than expected Aug services PMI data from Eurozone member countries, soured the sentiment and add fresh pressure on euro.
Negative momentum is strengthening on daily chart, MA’s remain in bearish setup (diverging 10/200DMA’s on track to for a death cross) and repeated close below Fibo support at 1.0786 (76.4% of 1.0635/1.1275 rally) contribute to negative near-term outlook.
Bears eye psychological support at 1.0700, violation of which will risk extension towards key support at 1.0635 (May 31 low).
However, bears may face increased headwinds from oversold conditions, with upticks to be capped by 200DMA (1.0817) to keep bears intact and offer better selling opportunities.
Only return above 1.0880 (broken 61.8%) would question bears.
Res: 1.0786; 1.0817; 1.0880; 1.0917.
Sup: 1.0733; 1.0700; 1.0667; 1.0635.
