Strong German data and Fed inflated Euro but gains are unlikely to last longer
The Euro extends recovery on Thursday, as better than expected German labor and inflation data added to positive near-term sentiment.
The single currency was also supported by weaker dollar, driven by dovish Fed and month-end selling.
Although the fundamentals are positive, it is unlikely that positive impact would last longer, as daily technical studies warn of recovery stall.
Momentum is heading south and about to enter negative territory and stochastic is overbought, with triple death-cross (30/200; 100/200 and 55/200DMA’s) additionally weighing on recovery.
Bulls cracked initial Fibo resistance at 1.1873 (23.6% of 1.2266/1.1751), but need a clear break of recent tops at 1.1881/95 zone, to allow for further correction, with extended upticks to stall under key barriers at 1.1975/1.2000 to keep larger bears in play.
Res: 1.1881; 1.1895; 1.1929; 1.1975
Sup: 1.1850; 1.1820; 1.1805; 1.1781