EUR/USD outlook: Bear trap signals boost recovery but near-term picture is still mixed
|EUR/USD
The Euro extends gains above 1.13 mark in early Tuesday, following sideways mode previous day, but managed to register the second consecutive daily close above 10DMA (1.1281) that adds to signals of a bear trap under 1.1290 Fibo support.
Fresh advance rose above last Friday’s high (1.1330), boosting hopes for stronger rebound, which looks for confirmation of sustained break above 1.1380 zone (Fibo 38.2% of 1.1692/1.1186 bear-leg/falling 20DMA).
Mixed daily techs (momentum is in a steep ascend, though still in the negative territory/5/10DMA’s are converging and about to form a bull-cross, but 10/20/30DMA’s continue to head south and stochastic enters overbought zone) make near-term picture unclear.
Two scenarios are currently in play: recovery stall under 1.1380 and fresh push lower that would keep bearish structure intact or lift above 1.1380 zone pivots that would sideline bears and open way for stronger correction towards Fibo barriers at 1.1439 (50% of 1.1692/1.1186); 1.1499 (Fibo 61.8%) and 1.1545 (falling 50DMA).
The dollar remains in defensive for the third straight day that supports Euro’s recovery, but growing fears about the impact of new virus variant Omicron, may further dampen the risk appetite.
Res: 1.1379; 1.1389; 1.1439; 1.1498.
Sup: 1.1305; 1.1281; 1.1258; 1.1204.
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