The pair emerges above daily cloud on Wednesday, on extension of Tuesday’s strong rally that left long-tailed and long-body daily bullish candle.
Today’s break above 111.81 pivot (daily cloud top / Fibo 38.2% of 114.36/110.23) was bullish signal but the rally was so far capped by falling daily Tenkan-sen line (112.05), showing hesitation at psychological 112.00 barrier.
In addition, a plethora of barriers that lies above and consisting of 10SMA (112.26), 20SMA (112.42) and 100SMA (112.58) may limit recovery rally.
Daily studies are mixed and see minimum requirement on close above daily cloud to signal further upside. However, lift above daily MA barriers is needed to confirm bullish continuation.
Otherwise, risk of recovery stall and fresh weakness could be expected on early upside rejection.
Release of US data and FOMC minutes, due later today would give more clues about near-term direction.
Res: 112.05, 112.26, 112.42, 112.58
Sup: 111.61, 111.37, 110.74, 110.50
