Consolidation below 100DMA likely to precede fresh push higher
The pair is taking a breather after steep six-day rally faced headwinds important barriers at 108.10/16 (falling 100DMA / Fibo 76.4% of 109.31/104.44).
Thursday’s action failed to close above these barriers and today’s fresh attempts higher were so far short-lived.
Near-term picture remains bullish and favors further upside after positive signals were generated on Thursday’s rally and close well above falling daily cloud as well as close above Fibonacci 100% expansion of wave C from 105.73 (30 Sep trough).
Consolidation scenario is also signaled by fading bullish momentum and stochastic reversing in overbought territory.
Dips should be ideally contained by daily cloud top (107.59) / broken Fibo 61.8% (107.45) before bulls resume, as the pair is on track for the third consecutive strong bullish weekly close that adds to positive outlook.
Caution of deeper pullback on break below 107.59/45 (daily cloud twists next week and could be magnetic) as well as positioning ahead of Fed that may delay bulls.
Converging 55/10DMA’s 107.22/09 mark next solid supports.
Res: 108.10; 108.25; 108.84; 109.00
Sup: 107.90; 107.59; 107.45; 106.88