The selloff, reinforced by a weekly broken Quasimodo line at 1.2287 and two converging weekly resistances (1.1641/1.6038), dragged the euro beneath the 1.22 handle (H4) going into the closing bell.
Despite the recent run to the downside, technicians will still have an eyeball on the daily coming in at 1.2246-1.2164. A break below this beast would likely confirm a bias down to the 1.2070 mark on the daily scale.
With the 1.22 handle now likely out of the picture, further downside to the H4 placed at 1.2111-1.2134, shadowed closely by the 1.21 handle, could be a possibility today.
A retest of 1.22 followed up with a full or near-full-bodied H4 bear candle would, in our opinion, be an acceptable signal to sell. The reason for demanding the additional candle confirmation here is simply due to the current daily in play!
Data points to consider: US housing data, Philly Fed manufacturing index and weekly unemployment claims at 1.30pm GMT .
Areas worthy of attention:
Supports: 1.2111-1.2134; 1.21 handle; 1.2246-1.2164; 1.2070.
Resistances: 1.2287; weekly resistances; 1.2276.