“¢ The cross struggled to build on Friday’s goodish rebound from one-week lows and remained capped at an important confluence hurdle, comprising of 50-hour SMA and a short-term descending trend-channel resistance.
“¢ Italian budget worries kept exerting some downward pressure on the shared currency and the cross traded with a negative bias for the fifth session in the previous six following an unexpected rebound in the UK manufacturing PMI.
“¢ Technical indicators on hourly/daily charts are holding in bearish territory and the fact that the cross remains below important intraday moving averages – 50, 100 & 200-hour SMA support prospects for an extension of the weakening trend.
“¢ However, a convincing break through the mentioned confluence barrier, currently near the 0.8900 handle, might negate the technical set-up and prompt some aggressive short-covering move in the near-term.
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Spot Rate: 0.8890
Daily High: 0.8909
Trend: Bearish below 0.89 mark
Resistance
R1: 0.8915 (100-period SMA H1)
R2: 0.8944 (50-day SMA)
R3: 0.8969 (R3 daily pivot-point)
Support
S1: 0.8872 (100-day SMA)
S2: 0.8848 (2-month low set on Sept. 20)
S3: 0.8835 (S3 daily pivot-point)
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