EURUSD Attempts Recovery After Monday’s Fall

EURUSD edged higher on Tuesday morning after Monday’s significant drop was cushioned by strong support at 1.0807 (daily Kijun-sen / 50% retracement of 1.0666/1.0948 rally) and failed to close below the converged 55/200DMA’s (1.0815).

Monday’s downside rejection created a bear-trap, generating an initial positive signal. Confirmation of this signal requires a lift above 1.0870 (the lower platform of the past four days, reinforced by the daily Tenkan-sen) to indicate an end to the corrective phase and shift the near-term focus higher.

Daily studies show mixed MA’s, while momentum and RSI are currently neutral.

However, tomorrow’s twist of the daily cloud could attract bears, leading to an attack on the thinning cloud. A break below this level would activate a negative scenario, risking a deeper drop towards the 1.0732 Fibo support (76.4%).

Eurozone preliminary Q2 GDP met expectations but was better than Q1, providing some support to the Euro. German inflation data, due later today, is being watched for fresh signals.

Res: 1.0840; 1.0870; 1.0881; 1.0902
Sup: 1.0814; 1.0802; 1.0758] 1.0732