The Euro regained traction on Monday after Friday’s 0.5% fall, but risk of deeper correction still exists.
Pullback from multi-month high at 1.1965 found footstep at 1.1754 and subsequent bounce on Friday and today’s extension above 1.1800, generate initial positive signals.
The action so far looks like a healthy correction as it stays above Aug lows at 1.1700 zone which mark pivotal supports.
Today’s action was additionally supported by the latest news about new coronavirus treatment that boosted risk sentiment
On the other side, extremely long Euro positions may require further consolidation and possible deeper pullback before bulls attack psychological 1.20 barrier.
Fading bullish momentum on daily chart and mixed MA’s support the notion, with more significant negative signals developing on weekly chart (momentum turns south and stochastic/RSI reverse from overbought zone) that keeps the pair under pressure.
Stronger bullish signals could be expected on firm break above Friday’s high at 1.1883 (also Fibo 61.8% of 1.1965/1.1754 pullback) while loss higher base at 1.1700 would signal further easing.
Traders focus on Tuesday’s German GDP and Ifo data for more signals.
Res: 1.1828, 1.1859, 1.1883, 1.1915
Sup: 1.1804, 1.1754, 1.1711, 1.1695
