The Euro stands at the back foot on Tuesday as dollar strengthens on fresh rise on US bond yields, supported by easing in trade tensions between the US and China. The EURUSD dipped to strong support at 1.1910 (4-hr cloud base/50% retracement of 1.1822/1.1996 upleg) in early Tuesday’s trading, extending weakness after strong upside rejection on Monday, when bulls stalled on approach to psychological 1.20 barrier. Subsequent pullback created red daily candle with long upper shadow, which was negative signal. Fresh weakness returned below 10SMA (1.1924), following repeated failure to close above it and generate positive signal for test of key 200SMA barrier (1.2015). Daily techs are still mixed as MA’s are in full bearish setup while momentum continues to strengthen. Pullback found footstep at 1.1910 with subsequent recovery attempts expected to be limited (hourly cloud top marks initial resistance at 1.1945, while extended upticks should be capped under 4-hr cloud top at 1.1980). Stronger bearish signal could be expected on firm break below 1.1910, as falling thick 4-hr cloud would continue to weigh. Bullish signal would be generated on break above 4-hr cloud, while break through 1.20 and probe above 200SMA would signal continuation of recovery leg from 1.1822. Weaker than expected German Q1 GDP data did not show significant impact on Euro, with focus turning towards EU GDP/IP data, due later today.
Res: 1.1945, 1.1963, 1.1980, 1.1996
Sup: 1.1910, 1.1889, 1.1875, 1.1863
