Bulls regain traction but need close above bull-trendline for positive signal
The pair regained traction on Friday and moved higher after holding in red for five consecutive days.
Pullback from double-top at 109.48 was contained by rising daily Kijun-sen and fresh optimism on positive signals from US/China trade talks inflated dollar.
Larger uptrend off 104.44 (26 Aug low) is still in play, despite Thursday’s dip and close below the bull-trendline (108.61), but recovery needs return and weekly close above the trendline to generate positive signal.
Next pivotal barriers lay at 108.90/99 (converging 10/200DMA’s, on track to create golden-cross) break above which is needed to confirm reversal.
Weak daily momentum requires caution, as repeated close below broken bull-trendline would generate negative signal for extended pullback towards 108.04 (55DMA) and 107.88 (1 Nov trough).
US retail sales (Oct 0.2% f/c vs -0.3% Sep) and industrial production (Oct -0.4% f/c vs -0.4% Sep) are key events today and may provide fresh direction signals.
Res: 108.75; 108.90; 108.99; 109.28
Sup: 108.36; 108.23; 108.04; 107.88