The cross accelerated sharply lower in European trading on Tuesday, falling 0.9% during the session.
Much stronger than expected UK services PMI data signaled significant improvement in the activity in UK economy’s dominant service sector which brightens the outlook and eases recession concerns.
Fresh weakness cracked key supports at 0.8813/0.8799 zone (Fibo 38.2% of 0.8547/0.8978 / Feb 14 former low / 55DMA) and looks for close below these levels to confirm bearish signal on completion of failure swing pattern on daily chart.
Daily studies weakened as MA’s (10/20/30) turned to bearish setup and south-heading momentum indicator broke into negative territory, but fresh bears may face strong headwinds from rising daily cloud (top of the cloud lays at 0.8780).
Res: 0.8839; 0.8857; 0.8876; 0.8891.
Sup: 0.8780; 0.8748; 0.8722; 0.8701.
