The Euro accelerated lower at the beginning of the European session on Tuesday, after holding within tight consolidation in Asia and hit new nearly seven-month low just under 1.16 mark.
The single currency maintain firm bearish tone and looks for further extension lower after Monday’s gap-higher opening and recovery attempts that stalled at 1.1728, offered better selling opportunities.
Political turmoil in Italy keeps the Euro under pressure, as markets fear that Italian elections, which could take place in August, could again raise questions about Italy’s role in the European Union.
Last Friday’s penetration and close within weekly Ichimoku cloud, as well as close below 1.1709 (Fibo 38.2% of 1.0340/1.2555 rally) were negative signals, as bearish daily/weekly techs maintain pressure, but oversold conditions suggest bears may take a breather ahead of next target and another key support at 1.1553 (07 Nov trough).
Violation of 1.1553 pivot would risk extension towards 1.1431/12 zone (converging weekly 200/100SMA’s).
Broken weekly clout top marks initial resistance at 1.1681, with falling 10SMA (1.1722) which tracks descend for over one month, expected to cap stronger upticks.
Res: 1.1656, 1.1681, 1.1722, 1.1750
Sup: 1.1585, 1.1553, 1.1500, 1.1747
