EURUSD – extended rally cracks 1.24 barrier and exposes 1.25 zone
The Euro dented round-figure barrier at 1.2400 on extension of daily advance of 0.9% so far.
Strong fall of US dollar, which accelerated after remarks from US Mnuchin, pushed the Euro to new over three-year highs.
Break above pivotal barrier at 1.2350 (18 Dec 2014 high) opens way towards 1.25 zone, as high of 17 Dec 2014 lies at 1.2514 and FE200% of current extended wave C of five-wave pattern from 1.1553 (07 Nov low) at 1.2531.
Today’s comments from Mnuchin which resulted in Euro’s strong rally, put ECB’s chief Mario Draghi in difficult position as markets expect him to try to slow down strong advance of the Euro on his press conference after ECB’s rate decision meeting tomorrow.
Draghi will have a tough job on Thursday as Euro bulls gained strong momentum and techs are pointing at 1.25 zone targets, with stronger rhetoric in attempts to soften Euro’s tone, threatening to produce opposite effects and spook markets.
Overbought studies on daily chart so far just warn as indicators continue to point higher, which signals opened way towards 1.25 zone.
Stronger advance through 1.2597 pivot (Fibo 61.8% of 1.3992/1.0340 descend) would unmask next significant barriers at 1.2900/1.3000 zone.
Res: 1.2402; 1.2435; 1.2514; 1.2531
Sup: 1.2350; 1.2323; 1.2292; 1.2233