The Euro holds positive tone in early Monday’s trading and rebounds after strong downside rejection on Friday, which left long-tailed daily Doji candle.
Increased prospect for US/China trade deal pressured greenback on fresh demand for riskier assets that pushed the single currency from the dangerous zone (Friday’s spike low marks the lowest in three months).
Daily momentum is turning up after bottoming while stochastic is in steep ascend, supporting scenario.
Fresh bulls took out initial barrier at 1.1300 (Fibo 23.6% of 1.1514/1.1234) but show hesitation at falling 10SMA (1.1317).
Recovery needs lift above 10SMA and extension and close above 1.1341 (Fibo 38.2% of 1.1514/1.1234/ last week’s highs) to generate bullish signal for stronger recovery and expose a cluster of daily MA’s at 1.1364/1.1402 zone.
A number of negative signals from the EU (signs of negative growth in Germany, US threats of tariffs on EU cars, Italian recession and slower bloc’s economic growth) weigh on Euro and could limit recovery.
Return and close below 5SMA (1.1295) would weaken near-term structure and increase risk of renewed attempt at key m/t support at 1.1215.
Res: 1.1317, 1.1341, 1.1364, 1.1402
Sup: 1.1295, 1.1260, 1.1234, 1.1215
