Euro holds positive tone after Thursday’s 0.5% advance and looks for test of next key barriers
The Euro maintains positive tone and consolidating under new two-week high at 1.0972 in early Friday’s trading.
The pair rallied strongly in the US session on Thursday, boosted by dollar’s month-end sell-off, advancing nearly 0.5% for the day, the biggest one-day gains since 7 Apr.
Decision of the ECB to keep the interest rates unchanged but leaving the door open for further stimulus in order to help bloc’s economy which faces strong economic contraction in Q2 and likely in whole 2020 year, also helped the Euro.
Thursday’s break above pivotal Fibo barrier at 1.0887 which capped the action for two weeks and extension and close above 1.0937/47 (50% of 1.1147/1.0727 / 55DMA) generated strong bullish signal.
Bulls eye strong barriers at 1.0986/88 (Fibo 61.8% / daily cloud base) and psychological 1.1000 level, reinforced by 100DMA, with 200DMA (1.1033) coming in focus.
Momentum indicator turned positive on daily chart after being in neutral mode for several days, underpinning the action, along with faster MA’s (10/20/30) in bullish setup, as holiday-thinned volumes can also help rally.
On the other side, overbought stochastic warns that bulls would face a tough job to clear strong 1.0986/1.1033 resistance zone.
Corrective dips towards 1.0900 zone are expected to provide better opportunities for re-entering bullish market.
Res: 1.0986; 1.1003; 1.1033; 1.1048
Sup: 1.0947; 1.0937; 1.0887; 1.0874