The Euro holds firmly in red in early European trading on Wednesday after recovery attempts in Asia were repeatedly capped by daily cloud base.
Hopes of forming a base above key Fibo support at 1.2172 after Tuesday’s action was rejected at 1.2181 and subsequent bounce left long-tailed bullish daily candle, are fading.
Thick daily cloud continues to weigh, along with strong dollar and expectations for dovish stance from the ECB tomorrow, which could further weaken the structure.
Firm break below key supports at 1.2172 (Fibo 38.2% of 1.1553/1.2555 / low of multi-month 1.2153/1.2555 consolidation of larger rally from 1.0340), would generate strong bearish signal for deeper correction of 1.0340/1.2555 advance and expose psychological 1.2000 support (also 200SMA).
Meanwhile, the pair may hold in extended congestion between 1.2172 and daily cloud base, awaiting fresh signals from the ECB.
Res: 1.2210, 1.2245, 1.2290, 1.2305
Sup: 1.2172, 1.2153, 1.2092, 1.2054
