The Euro remains at the front foot on Monday and attempts to extend last week’s 0.45% advance, which resulted in eventual weekly close above 1.1822 (Fibo 61.8% of 1.2555/1.0635) after double failure in past two weeks.
Last week’s action pushed in the upper part of two-week range, confirming that positive sentiment persists and larger bulls take a breather before resuming, supported by rising net long positions, which reached a record high.
Near-term action is expected to maintain bullish bias and focus targets at 1.1915 (6 Aug 27-month high/consolidation range top) and 1.20 (psychological). while holding above 10DMA (1.1808).
July’s massive bullish monthly candle (the pair was up nearly 5% for the month) underpins strongly the action, however bulls face strong headwinds from falling 100MMA (1.1868) which needs to be cleared to open way for final attack at psychological 1.20 barrier.
Daily studies remain supportive, but warning signals started to develop at weekly and monthly chart.
Overbought monthly stochastic and sideways-moving RSI are accompanied with fading bullish momentum that warns of correction. If bulls fail to take out 1.20 barrier (break would spark fresh bullish acceleration towards 1.2102/66, Fibo 76.4%/monthly cloud top) the risk of correction would increase.
Loss of current range floor (at 1.1700 zone) would generate initial signal of correction, which could extend towards 1.1500/1.1430 zone.
Res: 1.1867, 1.1908, 1.1915, 1.2000
Sup: 1.1822, 1.1808, 1.1780, 1.1753
