The Euro eased below 1.19 handle in early European trading on Friday after trading within tight consolidation in Asia.
The dollar started to regain traction after being hit by soft US inflation data on Thursday, bringing the single currency under renewed pressure.
Thursday’s strong recovery rally completed reversal pattern on daily chart but gains stalled under pivotal barrier provided by falling 10SMA (currently at 1.1942), keeping the downside vulnerable.
Daily indicators remain in mixed mode as momentum and slow stochastic continue to head north, while MA’s are in full bearish mode.
The downside is expected to remain vulnerable while falling 10SMA caps, but the pair may spend some time in consolidation between key points (1.1822 low, reinforced by weekly 55SMA and falling 10SMA at 1.1942) before establishing in fresh direction on break of either side.
Overall picture remains bearish as the pair is on track for the fourth weekly close in red, however, fresh attempts higher could be anticipated on week-end profit-taking.
Firm break above 10SMA would open way for further recovery and expose key barriers at 1.2017 (200SMA) and 1.2043 (Fibo 38.2% of 1.2400/1.1822 descend).
Conversely, loss of 1.1822 handle would risk test of initial target at 1.1790 (Fibo 76.4% of 1.1553/1.2555 upleg) and possible extension towards key med-term support at 1.1709 (Fibo 38.2% of 1.0340/1.2555 ascend).
Res: 1.1925, 1.1942, 1.1959, 1.1995
Sup: 1.1875, 1.1843, 1.1822, 1.1790
