The Euro is consolidating above fresh post-Fed lows at 1.1865 zone in early Thursday, with scope seen for further downside.
The single currency was sharply lower on hawkish tone after FOMC September’s meeting. Fed signaled one more rate hike this year and plans three hikes in 2018, as well as start of reducing its portfolio in October.
Wednesday’s bearish acceleration was contained by daily Kijun-sen (1.1877) which was dented but without close below, leaving space for consolidation before bears resume.
Bearish Engulfing on Wednesday as well as formation of H&S pattern on daily chart is strong bearish signal which requires break below Kijun-sen as initial support and the H&S pattern’s neckline at 1.1842 for confirmation.
Fresh bears may travel towards 1.1720 (daily cloud top / Fibo 38.2% of 1.1118/1.2092 upleg) and 1.1662 (17 Aug trough) in extension.
Corrective upticks are seen as selling opportunities and should be capped by hourly cloud (spanned between 1.1967 and 1.1994).
Conversely, return above 1.2000 will be bullish signal.
Res: 1.1900, 1.1926, 1.1967, 1.1994
Sup: 1.1877, 1.1861, 1.1842, 1.1826