The Euro maintains firm tone and holding near fresh high at 1.1959, posted in early hours of Asian session on Monday.
The single currency accelerated strongly on Friday, gaining 1.05% for the day, boosted after speech of ECB President Mario Draghi at Jackson Hole economic symposium, when the ECB’s chief avoided giving any comment about central bank’s monetary policy and indication of the start of tapering stimulus program.
Instead, Draghi said that the recovery in the Eurozone is gaining momentum.
Friday’s strong rally and eventual close above 1.1910 (former top of 02 August) was strong bullish signal for resumption of broader uptrend after completion of bullish flag continuation pattern.
Near-term focus turns towards 1.2000 target, which marks strong psychological / option barrier and the price may show stronger hesitation on approach. Overbought slow stochastic on daily chart supports the notion.
Mild downside action was seen so far, however, stronger dips cannot be ruled out. Good supports lay at 1.1900 zone and 1.1845 (Fibo 38.2% of 1.1662/1.1959 upleg) with 10/20SMA bull-cross forming at 1.1800 and underpinning the action.
Firm break above 1.2000 barrier would trigger large stops parked above and spark fresh acceleration towards targets at 1.2100 (round-figure) and 1.2166 (50% retracement of larger 1.3992/1.0340 descend).
Res: 1.1959, 1.2000, 1.2063, 1.2100
Sup: 1.1916, 1.1845, 1.1800, 1.1773
