The pair remains under increased pressure on Friday, with extension of previous day’s strong fall (down 0.64% in the biggest one-day fall since 20 July), which formed bearish outside day and generated initial negative signal.
Repeated failure to sustain probes above daily cloud resulted in strong bearish acceleration which is now threatening to break below cloud and generate strong bearish signal (pivotal supports lay at 110.64/56 – daily cloud base/Fibo 61.8% of 109.77/111.82 rally).
Firm break below daily cloud would expose 100SMA (110.31) with stronger acceleration lower, capable of travelling towards key supports at 109.77/79 (21 Aug low / 200SMA).
Weakening daily studies support scenario as 14-d momentum is forming bear-cross and breaking into negative territory, while slow stochastic is in steep descend and MA’s (10, 20, 30, 55) turned to bearish configuration. Cluster of converging daily MA’s between 110.89 and 111.11 marks solid barriers which should keep the upside protected.
Res: 110.89, 111.11, 111.43, 111.83
Sup: 110.64, 110.31, 110.00, 109.77
