200 DMA continues to cap but bias remains positive ahead of Fed
Fresh advance on positive news over US/China trade talks was so far unable to break key 200DMA obstacle (109.05) which capped Monday’s rally and continues to limit the action in early Tuesday.
Near-term action remains biased higher and looks for fresh attacks at 200DMA, break of which would open next strong barriers at 109.36/57 (Fibo 61.8% of 112.40/104.44 / weekly cloud base).
Consolidation under 200DMA needs to hold above daily Tenkan-sen / 10DMA (108.66) to keep immediate bulls in play and avoid deeper pullback.
Rising 20DMA (108.15) marks lower pivot and break here would sideline bulls.
The action is expected to remain in quiet mode as markets await Wednesday’s Fed policy decision, with wide expectations for another 0.25% rate cut.
The dollar may react positively on Fed’s decision as overall global environment is improving (US/China trade talks near solution / minimized risk of no-deal Brexit) that boosts risk demand.
Res: 109.05; 109.36; 109.57; 110.00
Sup: 108.76; 108.66; 108.25; 108.15