The pair extends strong rally to new multi-month high at 113.13 on Wednesday, as the dollar was boosted by hawkish comments from Fed’s chief Powell.
Tuesday’s 0.5% advance completed two-day 112.80/112.19 correction, which left inverted Hammer and signaled further advance.
Bulls are looking for retest of 2018 high at 113.38 (08 Jan) and Dec 2017 highs at 113.63/74 in extension.
Strong bullish sentiment was additionally boosted by hawkish remarks from Powel, which increase expectations for more rate hikes this year.
On the other side, overbought daily RSI and slow stochastic, with bearish divergence developing on 14-d momentum, warn of correction, but still without firmer signals.
Extended dips should find footstep above higher low at 112.19 (16 July trough) to keep bulls intact and avert risk of deeper correction on break.
Res: 113.13, 113.38, 113.63, 113.74
Sup: 112.83, 112.61, 112.19, 111.79
