The EURUSD is standing at the back foot in early Monday’s trading and probing again through 10 DMA (1.1281) which marks significant support as the pair has registered six consecutive daily closes above it.
This has generated a positive signal, but near-term action remains without clear direction after the recovery from the new 2021 low (1.1186) was capped by falling 20DMA and continues to move within a narrowing range between two indicators.
Triple weekly failure to close below pivotal Fibo support at 1.1290 (61.8% of 1.0635/1.2349) signals the formation of a bear-trap, which underpins the action, however, the signal still needs confirmation on a break above 20DMA (1.1334) and Fibo barrier at 1.1379 (38.2% retracement of 1.1692/1.1186 bear-leg).
Daily studies remain mixed, but weeklies are in a full bearish setup, adding to a negative outlook.
Expect initial direction signal on break of either barrier, with loss of 10DMA support to confirm bearish continuation and unmask targets at 1.1040/00.
Conversely, a sustained break of 1.1379, would ease downside pressure and allow for a stronger correction towards 1.1439 (50% of 1.1692/1.1186) and 1.1500 zones (Fibo 61.8%/falling 55DMA).
Res: 1.1334, 1.1379, 1.1439, 1.1500.
Sup: 1.1267, 1.1235, 1.1204, 1.1186.
