Risk of fresh weakness rises after 100SMA capped recovery attempts
|Recovery rally from new three-week low at 1.2832 that commenced in early European trading on Tuesday, showed signs of stall in early hours of American session, as broken 100SMA (1.2890) managed to cap corrective action.
In my morning forecast I pointed at 100SMA as ideal cap for positioning ahead of fresh weakness, after strong bearish signal was generated on Monday’s close below significant 1.29 support zone.
Repeated close below would re-confirm bearish stance for extension of bear-leg from 1.3217 (25 Jan high).
Bears would look for test of solid supports at 1.2807 (55SMA / 50% of 1.2397/1.3217) and 1.2786 (daily cloud top).
Momentum continues to trend lower in the negative territory, while stochastic turns south after brief recovery attempt from oversold territory, adding to negative signals.
BoE’s governor Carney, in his speech today said that global economic growth is likely to stabilize, but at slower pace and pointed to negative consequences of no-deal Brexit, which could be likely scenario of divorce between the UK and EU, if solution won’t be found in coming weeks until the 29 Mar deadline.
Res: 1.2890; 1.2915; 1.2942; 1.2996
Sup: 1.2832; 1.2807; 1.2786; 1.2710
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.