Recovery extension cracks key 200DMA barrier
Bulls stay firmly in play and probe through key barrier at 1.1880 (200DMA / Fibo 61.8% of 1.1988/1.1704), to hit two-week high (1.1898) on Wednesday, in extension of 1% advance in past two days.
Today’s action was boosted by solid EU data (Services / Composite PMI’s) which add to signals that bloc’s economic recovery is accelerating.
Bear-trap pattern on daily chart (under 1.1776 Fibo level) continues to underpin the action, which generated several bullish signals on break of pivotal barriers en-route.
Rally may face difficulties at 200DMA barrier as daily stochastic is strongly overbought and traders may collect profits from two-day advance.
Failure to close above 200DMA for the second straight day would signal a pause in rally which could provide better levels to re-enter bullish near-term market, while dips stay above 1.1850 zone (20DMA / broken Fibo 50% of 1.1988/1.1704).
Caution on break of 1.1850 handle which would expose next pivotal supports at 1.18 zone, loss of which would signal an end of corrective phase.
Clear break of 200DMA, on the other side, would signal bullish continuation through daily Kijun-sen (1.1908) that would unmask a lower platform at 1.1990 and psychological 1.20 barrier.
Res: 1.1908; 1.1921; 1.1946; 1.1990
Sup: 1.1863; 1.1850; 1.1812; 1.1788