EUR/USD outlook: Completion of bearish pattern on daily chart adds to downside risk
|EUR/USD
The Euro is holding in a narrow consolidation near one-month low in European session on Tuesday. Near-term focus is shifting to the downside, as strengthening dollar on fresh hopes of Fed’s further rate hikes weighs and additional pressure came from disappointing German data which showed a significant drop in country’s industrial production.
Daily studies show rising negative momentum and moving averages (10/20/30) in bearish configuration, with completion of three black crows bearish pattern contributing to negative signals.
Bears pressure initial Fibo support at 1.0679 (23.6% of 0.9535/1.1032) reinforced by rising 55DMA (1.0663), break of which would generate fresh bearish signal and expose strong support at 1.0564 (top of rising thick daily cloud), followed by targets at 1.0483/60 (Jan 6 higher low / Fibo 38.2%).
Caution on strongly oversold stochastic which warns that bears may pause for consolidation in coming sessions.
Broken daily Kijun-sen (1.0757) reverted to solid resistance which should ideally cap, though extended upticks under south-turning daily Tenkan-sen (1.0864) would keep near-term bearish bias in play.
Res: 1.0757; 1.0798; 1.0864; 1.0940.
Sup: 1.0679; 1.0663; 1.0564; 1.0483.
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