Euro extends advance on weaker dollar, eyes key 1.20 resistance zone
The Euro hit new high in nearly one month in early European trading on Wednesday, lifted by weaker dollar after data on Tuesday showed that inflation in the US is picking up but is not going to alter current fed’s policy of keeping ultra-low interest rates and maintaining the bond-buying program.
Extension of yesterday’s 0.3% advance ended three-day consolidation and completed bullish pennant pattern, signaling continuation of the rally from 1.1704 (Mar 31 low).
Fresh bulls broke through pivotal Fibo barrier at 1.1950 (38.2% of 1.2349/1.1704 descend) and pressure 55DMA (1.1973) which guards next important barriers at 1.1990 (mid-March lower platform), 1.2000 (psychological) and 1.2024 (base of falling daily cloud).
Today’s close above 1.1950 would add to positive signals.
Rising bullish momentum and formation of daily Tenkan-sen / Kijun-sen bull-cross underpin the action, but strongly overbought stochastic warns that bulls may face headwinds at 1.2000 resistance zone, with dips expected to offer better opportunities to re-enter bullish market.
Broken Fibo barrier at 1.1950 reverted to initial support, followed by 1.1927 (former high of Apr 8 / rising 5DMA) and 200DMA (1.1896) which is expected to keep the downside protected.
Res: 1.1973; 1.1990; 1.2000; 1.2024
Sup: 1.1950; 1.1927; 1.1896; 1.1873