Bulls lose traction on existing tariff fears
The pair dips towards 106 handle on Friday as traders took profits from two-day rally that spiked to one-week high at 106.68 on Thursday.
Also, persisting fears of new tariff hikes on 1 Sep, despite signals of continuation of talks between the US and China, keep traders cautious.
Positive signals on Thursday’s break and close above converged 10/20DMA’s (106.13/21) and Fibo 38.2% of 109.31/104.44 (106.30), started to fade as today’s weakness returned below Fibo support and dented MA’s, with close below to generate fresh negative signal.
Daily momentum turned sideways and stochastic is entering overbought territory that add to negative near-term outlook, however, positive signals emerge on weekly chart, as the pair is on track for strong bullish weekly close, weekly momentum rises and stochastic reverses from oversold zone that keeps the downside protected for now.
Extended dips should find ground above 100.80 Thursday’s low / Fibo 38.2% of 104.44/106.68) to keep near-term bulls in play.
Res: 106.53; 106.73; 106.81; 106.97
Sup: 106.60; 105.80; 105.59; 105.30