Bullish bias above daily cloud but key barriers still cap
The Euro stays bid and holding under session high at 1.1281 in early European trading after overnight’s dip was contained by converged 10/55 DMA’s / daily cloud top (1.1242).
The single currency rallied strongly in late Thursday on dovish comments from NY Fed President Williams, which markets understood as signals for more aggressive rate cut, but subsequently eased after Fed officials toned down the comments.
Near-term bias remains with bulls as fresh strength touched again strong barriers at 1.1280 zone and action being supported by rising daily momentum and underpinned by thickening daily cloud.
Firm break above 1.1280 zone (tops of 11/15 July / converged 30/20DMA’s) would signal extension of bounce from double-bottom at 1.1200 zone towards psychological 1.1300 barrier (also 50% retracement of 1.1412/1.1193) and 200DMA (1.1318).
On the other side, weaker than expected German PPI data softened near-term tone, keeping in play risk of repeated rejection at 1.1280 zone pivots.
Bearish scenario requires return and close below daily cloud (1.1227/42) to re-focus key supports at 1.1200/1.1180 zone.
Res: 1.1277; 1.1285; 1.1300; 1.1318
Sup: 1.1248; 1.1242; 1.1227; 1.1200