The dollar is standing at the back foot in European trading on Monday following Friday’s inverted hammer (bearish signal) which was formed after a four-day advance stalled on probe above 110 barrier.
Rising risk of pullback is verified by bull-trap above the 110 mark on the daily chart and strong weekly gains that prompted profit-taking.
Daily technical studies show stochastic reversing from the overbought territory and 14-d momentum turned to sideways mode, supporting the notion.
Today’s bearish close would generate initial bearish signal which would look for confirmation on a close below double-Fibo support at 109.57/55 (Fibo 38.2% of 108.55/110.19 upleg / 23.6% of 107.47/110.19).
Only bounce and close above 110 would neutralize risk of pullback and bring larger bulls to play.
Res: 109.81, 110.00, 110.19, 110.55.
Sup: 109.55, 109.43, 109.15, 108.91.
