The Euro is consolidating above new multi-week low (1.1562) posted last week after larger bears cracked key 1.16 support zone (Sep/Nov 2020 higher base) and registered a marginal weekly close below here.
Overall structure remains negative and favors bearish continuation, but oversold daily studies suggest bears may take a breather above 1.1600 zone.
Consolidation should be capped by solid barriers at 1.1659/64 (daily Tenkan-sen/former low of Aug 20) to keep bears intact and offer better levels to re-enter larger bearish action.
Firm break of 1.1600 pivots would expose next key supports at: 1.1572 (cracked 200WMA), 1.1538 (weekly cloud base) and 1.1492 (50% retracement of 1.0635/1.2349, Mar 2020/Mar 2021 uptrend), break of which would confirm reversal.
Last week’s large bearish weekly candle (the pair was down 1.13% for the week, thee biggest weekly fall since the third week of June) weighs on near-term action, while firm dollar adds pressure on the single currency.
Caution on break above 1.1659/64 barriers that would signal stronger correction, which would require verification on sustained break above 1.1700 zone (Fibo 38.2% of 1.1909/1.1562/psychological).
Res: 1.1660, 1.1695, 1.1736, 1.1761.
Sup: 1.1587, 1.1562, 1.1538, 1.1492.
