Bulls likely to resume after consolidation
The Euro holds firm bullish tone and consolidating around new two-month high in early Wednesday, after bulls generated fresh bullish signals on Tuesday’s close above pivots at 1.0037/50 (100DMA / Fibo 61.8% of 1.0368/0.9535 respectively) and dented key barrier at 1.0093 (Oct 26 recovery top) hitting new marginally higher high at 1.0097.
This signals that bulls may extend further, with targets at 1.0172/97 (Fibo 76.4% / September high) coming in focus.
Weakening dollar and signals that the ECB will continue raising interest rates even as economy suffers, adds to positive sentiment.
Traders focus on tomorrow’s US inflation data, which could further lift euro if CPI eases further that would contribute to expectations of softer Fed’s stance on policy tightening.
As expected, bears faced headwinds at key barrier (1.0093), with overbought daily studies adding to signs of partial profit taking and consolidation.
Initial support lays at 1.0050 (broken Fibo 61.8%) with more significant supports at 1.0000 / 0.9952 (parity / broken daily cloud top) expected to contain dips and keep bulls intact.
Res: 1.0097; 1.0172; 1.0197; 1.0268
Sup: 1.0050; 1.0000; 0.9952; 0.9936