EURUSD – consolidation above daily cloud to precede rally towards 1.2000 target
The Euro is maintaining firm tone and consolidating under fresh two-month high at 1.1944 on Monday.
Last Friday’s rally that closed well above pivotal barriers at 1.1877/86 (daily cloud top / Fibo 61.8% barrier) was strong bullish signal for further advance towards psychological 1.2000 resistance.
The notion was supported by the third consecutive strong bullish weekly close.
Risk of recent political crisis in Germany was offset by strong German business confidence data that neutralized downside risk.
Friday’s bullish acceleration approached our initial target at 1.1965 (Fibo 76.4% of 1.2092/1.1553 downleg), with extended consolidation below here not ruled out on strongly overbought slow stochastic on daily chart and RSI turning sideways just under overbought zone boundary.
Broken daily cloud top (1.1877) is seen ideally containing and guarding 1.1830 zone (daily cloud base / rising Tenkan-sen) which is expected to limit extended dips and keep bullish structure intact for final push towards 1.2000 target.
Res: 1.1944; 1.1965; 1.2000; 1.2033
Sup: 1.1911; 1.1886; 1.1877; 1.1830