Bulls may take a breather after strong post-ECB rally
The Euro rose further and hit new five-week high on Friday morning, keeping firm bullish tone after 1.06% rally on Thursday (the biggest one-day gain since Feb 2).
The single currency was lifted by hawkish ECB, which raised interest rates by 25 basis points and signaled more hikes in the near future, in continuous fight with high inflation.
Thursday’s rally closed well above pivotal Fibo barrier at 1.0917 (61.8% retracement of 1.1091/1.0635) adding to positive signals on daily chart.
Rising bullish momentum and formation of daily Tenkan-sen/Kijun-sen bull cross) contribute to positive signals, as bulls pressure barriers at 1.0966/1.0983 (daily cloud top / Fibo 76.4%) and psychological 1.10 level, violation of which to confirm reversal.
Caution on overbought conditions which may slow bulls for consolidation before attacking next targets, with shallow dips to be ideally contained by broken Fibo 61.8% level (1.0917).
The pair is on track for the biggest weekly gains since early November, as large weekly candlestick completed reversal pattern on weekly chart.
Res: 1.0962; 1.0983; 1.1000; 1.1053
Sup: 1.0933; 1.0917; 1.0881; 1.0863