The Euro extends recovery in early European trading on Thursday, boosted by stronger pound after PM May’s confidence vote win, positive signal from bullish engulfing pattern on Wednesday and weaker dollar.
Recovery is also supported by rising bullish momentum, but is expected to face strong headwinds from the base of falling thick daily cloud (1.1431), which capped rally on Monday.
In addition, the ECB meets today and is widely expected to keep its ultra-low interest rate unchanged, but markets fear of dovish tilt from the central bank which could put the single currency under renewed pressure.
The pair currently holds above a cluster of converged daily MA’s (10, 20, 30) at 1.1355/60 zone, with break and close below expected to weaken near-term structure.
On the other side, penetration of daily cloud and close above pivotal Fibo barrier at 1.1444 (38.2% of 1.1815/1.1215) would generate fresh bullish signal.
Res: 1.1393, 1.1414, 1.1431, 1.1444
Sup: 1.1355, 1.1343, 1.1306, 1.1267
