The Euro edged higher in early Friday’s trading as traders booked profit after Thursday’s 0.7% daily fall, sparked by dovish stance from ECB chief Mario Draghi, who highlighted further downside risk and weaker than expected near-future economic data.
Extension of larger downtrend from 1.1569 (2019 high) generated strong bearish signal on Thursday’s close below key support at 1.1350 (daily cloud base/Fibo 61.8% of 1.1215/1.1569 rally).
In addition to weak PMI’s and soft tone from ECB, another negative factor was release of weaker than expected German Ifo business climate data which came at 99.1, undershooting forecast at 100.7. Recovery action wasn’t affected by weak data so far, as traders took profit after Thursday’s fall and positioning for fresh downside. Daily studies in full bearish setup support scenario, with extended corrective upticks to be capped under broken 1.1350 pivot and maintain bearish bias. Break below cracked Fibo support at 1.1299 (Fibo 76.4% of 1.1215/1.1569) would expose a double-bottom at 1.1267/69 (28 Nov/14 Dec lows) and open way towards key med-term support at 1.1215 (2018 low posted on 12 Nov).
Res: 1.1334, 1.1350, 1.1375, 1.1409
Sup: 1.1300, 1.1269, 1.1215, 1.1186
