The Euro is consolidating after almost 0.6% drop on Thursday (the biggest one-day loss since Feb 13).
Stronger than expected US PPI data added to hawkish rate outlook following last week’s hot inflation report and lifted the dollar.
Fresh bears found footstep at pivotal Fibo support at 1.0871 (38.2% of 1.0695/1.0981 bull-leg), with stronger bounce to signal a healthy correction and keep larger bulls in play for fresh push higher.
Daily close above broken 10DMA (1.0908) is needed to generate initial reversal signal and open way for further recovery.
Overall bullish setup of daily studies supports the notion however, downside risk still exists as near-term action is weighed by completion of bearish failure swing pattern on daily chart and a bull-trap above daily Ichimoku cloud.
Break below 1.0871 pivot to expose next key support at 1.0835 (daily cloud base reinforced by Kijun-sen) violation of which to sideline larger bulls and risk deeper pullback.
Res: 1.0913; 10963; 1.0981; 1.1000.
Sup: 1.0871; 1.0804; 1.0795; 1.0762.
. Stronger than expected US PPI data added to hawkish rate outlook following last week’s hot inflation report and lifted the dollar.){kind=link}