The pair is holding near one week high at 108.16 in early European trading on Thursday, following overnight’s bullish acceleration on news that US and China have a tentative deal.
Extension of Wednesday’s rally broke above important Fibo barrier at 107.98 (61.8% of 108.72/106.78) and cracked falling 20SMA (108.09), looking for fresh bullish signal on close above these levels.
Rising momentum is about to break into positive territory and supporting the advance, along with north-heading RSI and stochastic.
Bulls eye key barriers at 108.80/92 (11 June high/Fibo 38.2% of 112.40/106.78 descend), violation of which would generate initial reversal signal. Solid supports lay at 107.75 (daily Tenkan-sen) and 107.52 (5SMA).
Talks between US President Trump and Chinese President Xi Jinping on G20 meeting (28/29 June) will be closely watched.
The greenback would receive fresh boost if two leaders reach a deal of not imposing more tariffs that would also put on hold Fed’s decision to cut interest rates, while opposite scenario on failure of trade talks would keep the door open for rate cuts and increase pressure on dollar.
Res: 108.16, 108.26, 108.57, 108.80
Sup: 107.88, 107.75, 107.52, 107.24
