Bulls extend above 1.10 after 1% rally on Thursday
The Euro extends advance and broke above 1.10 barrier on Friday, following strong rally on Thursday (the pair was up over 1% in the biggest one-day gains since 5 Aug).
Dovish shift from Fed that raised expectations for rate cut, deflated dollar and gave fresh boost to the single currency.
Today’s break of psychological 1.10 barrier (also 50% retracement of 1.1239/1.0778) was bullish signal, as Thursday’s massive bullish daily candle underpins the action and daily cloud twist also expected to attract bulls.
Rising bullish momentum on daily chart and 5/10/20DMA’s in bullish setup add to positive outlook.
Bulls pressure 55DMA at 1.1035 and eye pivotal barriers at 1.1051/63 (100DMA / Fibo 61.8% of 1.1239/1.0778) close above which would generate reversal signal and unmask 200DMA (1.1098).
Strongly overbought daily stochastic warns that bulls may consolidate before attacking 1.1063 pivot, with dip-buying favored while broken pivot, now reverted to strong support at 1.0954 (Fibo 38.2% / 30DMA) holds.
German labor and inflation data are in focus as key events in European session.
Res: 1.1035; 1.1051; 1.1063; 1.1098
Sup: 1.1000; 1.0982; 1.0954; 1.0904