The Euro eases from new 11-week high at 1.1257 on Thursday, partially due to overbought conditions and partially as positioning ahead of ECB’s policy announcement. The pair holds in steep uptrend which lasts almost three weeks, boosted by weak dollar and growing optimism that post-pandemic recovery will pick up.
The rally took out several strong technical barriers on the way, with the last (100WMA / weekly cloud top) being dented on Thursday but without clear break that prompted today’s easing.
Daily RSI and stochastic turned south, on the way to emerge from overbought territory that support scenario of pullback.
Fundamentals are going to be again the key driver as markets widely expect ECB to signal an extension of existing 750 billion Euros worth bond buying program in attempts to support bloc’s economies, hit badly by coronavirus lockdown.
Such decision of the central bank would give fresh boost to the single currency for extension of the uptrend towards target at 1.1292 (Fibo 76.4%).
Markets also focus today’s US jobless claims release (1.8m f/c vs 2.12M last week) with figure below 2M seen as positive as this will be the first time that claims come below two million since 19 March.
The pair is expected to keep firm bullish tone while dips hold above broken Fibo 61.8% of 1.1494/1.0635, reinforced by rising 5DMA (1.1166) while break here would risk deeper pullback and expose breakpoint at 1.1073/65 zone (Fibo 38.2% of 1.0774/1.1257 / daily cloud top).
Res: 1.1224, 1.1257, 1.1284, 1.1369
Sup: 1.1166, 1.1143, 1.1102, 1.1066
