EURUSD – bullish outlook above 30SMA, but 1.24 marks significant obstacle
The Euro is consolidating under 1.24 handle in early Wednesday’s trading, maintaining positive tone as dollar stands at the back foot on unexpected dismissal of US Secretary of State Tillerson.
Strong bounce from daily cloud top on Tuesday was bullish signal for continuation of the bull-leg from 1.2272, boosted by Tuesday’s close above 1.2380 (Fibo 61.8% of 1.2446/1.2272 bear-leg).
Additional support comes from formation of 10/30SMA bull-cross at 1.2344, with bullish daily techs continuing to underpin.
Firm break above cracked 1.24 pivot (Fibo 61.8% of 1.2555/1.2154 descend) would open way for retest of double top at 1.2446 (07/08 Mar highs) and signal further retracement of 1.2555/1.2154 bear-leg.
Solid support at 1.2344 (converged 10/30 SMA’s, forming bull-cross) is expected to hold downticks and keep near-term bulls intact.
Conversely, close below 1.2344 would soften near-term structure and shift risk lower.
ECB Draghi spoke in early hours of European session, saying nothing significantly different and sending Euro lower on remarks that overall picture of the bloc’s economy is satisfactory but the central bank needs more evidence of inflation rising.
Meanwhile, the single currency showed no reaction on German Feb CPI data which came in line with expectations and focus turning towards EU Industrial Production (Jan f/c -0.4% vs 0.4% in Dec) and US retail sales data (Feb f/c 0.3% vs -0.3% in Jan), which could provide fresh signals.
Res: 1.2412; 1.2446; 1.2460; 1.2500
Sup: 1.2363; 1.2344; 1.2326; 1.2290