Near-term action remains congested under daily cloud but still biased higher
The Euro regained traction after being dragged by lower pound in early European trading on Wednesday and remains constructive, despite the action in past few sessions was repeatedly capped and heavily weighed by falling thick daily cloud.
Fresh upside attempts in early morning today cracked again daily cloud base (1.1048) but was so far unable to sustain gains.
Daily techs maintain strong bullish momentum that underpins the action, along with bullishly aligned MA’s (10/20/30) and Tenkan/Kijun-sen lines.
Regarding the outcome of Brexit talks, the single currency may benefit from both scenarios.
In case two sides reach a deal, Britain will need to pay for the divorce that would stimulate bloc’s economy, hurt by weakening German economy, at the edge of recession.
In case no deal is reached, pound will be heavily sold and traders may look for safer assets, among which is the Euro.
Today’s action is contained by broken Fibo 61.8% level (1.1021) and has more space for pullback towards key 1.1000/1.0980 support zone, which needs to hold and keep positive bias.
Bullish scenario requires eventual firm break of daily cloud base and confirmation on extension above pivots at 1.1082/1.1109 (Fibo 38.2% of 1.1412/1.0878 / 13 Sep high).
Res: 1.1048; 1.1062; 1.1082; 1.1109
Sup: 1.1019; 1.1000; 1.0980; 1.0949