The pair holds around 111 handle in early European trading on Friday, down from Asian high at 111.24, which also marks the high of Thursday’s rally.
Daily Kijun-sen capped upside attempts for the third straight day, marking strong resistance (reinforced by broken Fibo 38.2% of 108.11/113.17 upleg).
Long-tailed candles in past two days marked strong downside rejections after rising 55SMA offered footstep for the bear-leg from 113.17 (19 July six-month high) but provided little support in recovery attempts for now.
Near-term downtrend from 113.17 is still intact and risk of bearish continuation exists, as momentum is weakening.
On the other side, slow stochastic is reversing from oversold territory and gives positive signal while daily MA are in mixed setup, marking overall picture mixed and suggesting the pair may hold in extended consolidation before establishing in fresh direction.
The dollar enjoys support from strong fundamentals but is pressured by political factors, adding to mixed near-term signals.
Bearish signal could be expected on firm break below 110.64/55pivots (50% of 108.11/113.17 / rising 55SMA) which would open way towards strong supports at 110 zone (200SMA / Fibo 61.8% / daily cloud top).
The pair is on track for the second consecutive bearish weekly close, which supports negative scenario.
Conversely, close above daily Kijun-sen would generate bullish signal, which requires confirmation on break and close above 111.57 (Fibo 38.2% of 113.17/110.58 bear-leg).
Res: 111.24, 111.46, 111.57, 111.88
Sup: 110.91, 110.55, 110.10, 109.99
