EURUSD remains in directionless mode on Tuesday, but deeper pullback could be anticipated
EURUSD
The Euro stays in a choppy mode for the second day, despite brief probe above 1.2300 barrier overnight.
The pair returned quickly from the session high at 1.2323, staying at the back foot during European trading.
Strong indecision is signaled by long-legged Doji left on Tuesday, with today's action remaining in directionless mode.
Negative signals are developing on daily chart and weigh on the pair, as daily RSI and slow stochastic are reversing in the overbought territory and momentum is turning south, suggesting corrective action.
Close below lows of Mon/Tue at 1.2187/95 would generate initial bearish signal for extension towards pivotal support at 1.2167 (Fibo 38.2% of 1.1915/1.2323 upleg).
Rising 10SMA marks strong support at 1.2093, where extended dips should find ground, before larger bulls resume.
EU inflation data, released today, showed CPI in line with expectations in December (1.4%) which could satisfy hawks.
On the other side, inflation remains below central banks target and policymakers remain cautious about interest rate hike, which could affect the pace of Euro's bulls and fuel corrective action.
Res: 1.2296; 1.2323; 1.2350; 1.2400
Sup: 1.2208; 1.2187; 1.2167; 1.2119
Interested in EURUSD technicals? Check out the key levels
Author
Slobodan Drvenica
Windsor Brokers
Industry veteran with over 22 years’ experience, Slobodan Drvenica joined Windsor Brokers in 1995 when he was an active trader for more than 10 years, managing the trading desk and own account departments.
