Initial reversal signal is developing on daily chart
The Euro is holding a bit firmer footing in early European trading on Thursday after dollar failed to benefit more from recent hawkish comments from Fed officials.
Fresh strength might be generating an initial reversal signal after yesterday’s action ended in inverted hammer candle and oversold stochastic turned north.
However, this is still insufficient and more action at the upside will be needed to verify bullish signal, as momentum indicator on daily chart is still in the negative territory.
Fresh recovery pressures initial Fibo barrier at 1.0754 (23.6% of 1.1032/1.0669 bear-leg), but acceleration through 1.0800/20 zone (Fibo 38.2% / 10DMA) is needed to ease downside pressure and open way for stronger recovery.
Otherwise, limited upticks would likely mark a correction ahead of continuation of a bear-leg from 1.1032 (Feb 2 peak).
Lower than expected figures of German harmonized CPI in January contributed to Euro’s fresh strength, but markets look for more signals.
European Commission meets today and will release its economic growth forecast, while weekly jobless claims are the key release in US.
Traders await stronger signals from the US inflation report, due next Tuesday.
Res: 1.0781; 1.0807; 1.0819; 1.0850
Sup: 1.0679; 1.0590; 1.0573; 1.0483