Bulls hold grip but caution on growing signals of pullback
The Euro has established above psychological 1.10 level and holding gains above former top at 1.1032, with Friday’s upside extension to new one-year high, adding to positive signals.
On the other hand, strongly overbought daily studies and 14-d momentum turning south, point to growing risk of rally’s stall and pullback that would prompt traders to collect some profits on larger long positions.
This is so far seen as an indication, with more evidence needed to generate negative signal, however the idea of bulls taking a breather after strong acceleration will remain on the table.
Weekly close will be in focus, as the pair is on track for the biggest weekly gain since the second week of Nov 2022 and also for the fourth consecutive bullish week.
Potential dips should be shallow in current euro-positive environment and offer better prices to re-enter larger uptrend, with 1.10 level offering initial support, followed by broken 100WMA/10DMA (1.0945) and 20DMA (1.0880) expected to contain extended dips and mark a healthy correction ahead of fresh push higher.
Res: 1.1075; 1.1100; 1.1154; 1.1229
Sup: 1.1032; 1.1000; 1.0945; 1.0880