The Euro ticked higher in early Friday after strong fall in past two days found footstep at daily cloud top which provides solid support, currently at 1.2296. Near-term structure weakened after bulls were capped by bear-trendline off 1.2555 peak at 1.2412 on Wednesday and Thursday’s strong bearish acceleration resulted in close below a cluster of daily MA’s (10,20,30SMA) in 1.2322/47 zone, which now turned to resistances.
Momentum is moving into negative territory and adding to existing pressure, signaled by MA’s bearish setup.
Today’s brief bounce was triggered by weaker dollar on fresh political uncertainty in the US and could be seen as a breather before bears continue.
Strong support zone between 1.2296 and 1.2265, consisting of daily cloud top, 55SMA and Fibo 61.8% of 1.2154/1.2445 upleg needs to be cleared to complete failure swing pattern on daily chart and signal bearish continuation.
EU inflation data are key event of European session, with a batch of data expected in the American session (US housing data, IP, Michigan consumer sentiment) which could provide fresh direction signals.
Res: 1.2332, 1.2348, 1.2399, 1.2412
Sup: 1.2296, 1.2278, 1.2265, 1.2223
