Recovery to face strong headwinds at strong1.0740 resistance zone
The Euro remains at the front foot in and continues a gradual extension higher after the pullback from December’s high at 1.0736 (posted on Dec 15, the highest in seven months), found solid ground at 1.0580 zone (broken Fibo 38.2% of 1.2266/0.9535 fall / rising 20DMA).
Initial signs of a higher base need confirmation on sustained bounce, with improved risk sentiment on China’s upward revision of its GDP estimations in 2023, adding to positive near-term tone, along with bullish daily studies.
On the other hand, bulls are expected to face strong headwinds on approach to key barriers at 1.0736/45 (Dec 15 high / base of falling thick weekly cloud) which may stall the rally on failure to break higher.
Bearish scenario sees loss of 1.0780 support zone as initial negative signal, with extension through pivots at 1.0487/60 (daily Kijun-sen / Fibo 61.8% of 1.0290/1.0736) to further weaken near-term structure and risk deeper pullback.
Near-term bias is expected to remain with bulls while the action stays above 1.0580, though firm break of 1.0736/45 barriers is required to signal bullish continuation of the upleg from 0..9535 (Sep 29 low).
Res: 1.0707; 1.0736; 1.0745; 1.0786
Sup: 1.0580; 1.0487; 1.0460; 1.0329