The Euro is trading within narrow range on Thursday, following pullback from new four-month high (1.1452) posted previous day.
Bulls showed a lack of traction to sustain break higher and the price dipped back and closed below previous high (1.1422).
Wednesday’s action left daily candle with long upper shadow that could be seen as initial negative signal for deeper pullback towards (1.1385/72 (Fibo 23.6% of 1.1168/1.1452/rising 5DMA) and 1.1343/30 (Fibo 38.2%/rising 10DMA).
Daily stochastic is overbought and reversing while momentum turned sideways and support the notion.
Overall bullish structure keeps focus at 1.1495 (2020 high) as initial target, with stronger bullish acceleration to expose barrier at 1.1595 (50% retracement of 2018/2020 1.2555/1.0635 fall), with consolidative/corrective action likely to precede rally.
Traders await today’s ECB policy meeting for possible fresh signals. The central bank is expected to keep policy on hold and assess depth of contraction caused by coronavirus lockdown, as well as effectiveness and negative side-effects of its latest measures, taken during the crisis.
Recent better than expected economic data from the bloc could be one of the reasons for ECB to stay on hold as the economy shows signs of recovery after the biggest collapse in living memory.
Also, the central bank wants to keep up pressure on the EU leaders to eventually agree on delayed fiscal support.
Res: 1.1418, 1.1452, 1.1495, 1.1519
Sup: 1.1385, 1.1372, 1.1343, 1.1330