The Euro remains firm in early Thursday’s trading and consolidating around 1.1400 handle after posting new one-year high at 1.1420 in Asia.
Strong rally extends into third day and dented targets at 1.1414/28, firm break of which would open way towards next target at 1.1614 (02 May 2016 peak).
Strong bullish sentiment was boosted by comments from ECB President Mario Draghi on Tuesday who hinted that the ECB could trim its stimulus towards the end of the year. Markets interpreted Draghi’s message as signal of the beginning of tighter monetary policy in the Eurozone that sparked strong rally of the single currency.
Sustained break above 1.1428 (24 June 2016 high) could trigger fresh extension towards Fibo projections at 1.1448 (200%) and 1.1511 (238.2%).
On the other side, slow stochastic is deeply in overbought territory on daily chart but continues to head north, while daily RSI is at the border of overbought zone, suggesting corrective action in the near-term.
Initial support lies at 1.1374 (session low), ahead of more significant former pivotal barrier, now support at 1.1300 and ascending converged daily Tenkan-sen/Kijun-sen at 1.1270, above which extended corrective dips are expected to find support.
Res: 1.1428, 1.1448, 1.1511, 1.1550
Sup: 1.1374, 1.1300, 1.1270, 1.1230