The Euro remains under increased pressure for the third straight day, driven by risk aversion on renewed worries about slower global growth.
Downbeat China’s industrial production and retail sales data, PBOC rate cut and unexpected strong fall in the US Empire State manufacturing index (the index hit the lowest since May 2020) boosted uncertainty and prompted investors into safety that lifted dollar.
Fresh extension lower on Tuesday probes again through pivotal Fibo support at 1.0160 (50% retracement of 0.9952/1.0368 upleg) which limited downside action in past three weeks. Daily studies turned to bearish setup following Monday’s close below converged 10/20DMA’s at 1.01218/10, as 14-d momentum broke into negative territory.
Bears need clear break of 1.0160 Fibo level to generate fresh negative signal, which will look for confirmation on extension and close below 1.01 zone (Fibo 61.8% of 0.9952/1.0368) and signal an end of corrective phase after rejection at parity level.
On the other side, repeated failure to clearly break 1.0160 pivot would sideline immediate downside risk, but near-term tone will remain weak while the action stays below 10/20DMA’s.
Res: 1.0177; 1.0218; 1.0270; 1.0307.
Sup: 1.0111; 1.0096; 1.0050; 1.0000.
