Euro was boosted by pound’s rally but bulls lose traction at 1.12 zone barriers
The Euro surged to four-month high in Asia on Friday, underpinned by strong rally of British pound, but EURGBP losses tempered gains.
Fresh advance surged through important barriers (200DMA / former highs) but faced strong headwinds from 1.1200 resistance zone (psychological / Fibo 61.8% of 1.1412/1.0878) and stays below for now.
Bullish daily studies and large bullish weekly candle add to positive outlook, but the pair needs weekly close above 200DMA (1.1153) and former highs at 1.1179/75 to confirm bullish signal.
Lift above 1.1200 zone would open another pivotal barrier at 1.1236 (Fibo 38.2% of 1.1815/1.0878 2019 fall), break of which would generate reversal signal and spark further short-squeeze.
The pair may hold in extended consolidation while 1.12 caps but would remain biased higher while holding above 200DMA.
Increased downside risk could be expected on return and close below 200DMA.
US retail sales is key event of today’s US session.
Res: 1.1200; 1.1208; 1.1230; 1.1290
Sup: 1.1179; 1.1162; 1.1153; 1.1101