The Euro hit fresh five-week high at 1.0713 today, in extension of last Thu/Fri rally from 1.0524 trough.
The pair broke above thickening daily cloud that generated bullish signal, with Friday’s long bullish daily candle underpinning near-term rally.
The rally also cracked important barrier at 1.0700 (Fibo 61.8% retracement of 1.0827/1.0492), with close above it to provide another positive signal for extension of recovery rally from 1.0492 higher base.
Daily MA’s turned into full bullish setup, with bullish momentum building up and being supportive for further advance
Easing from fresh high is expected to face strong support at 1.0655 (daily cloud top / 100SMA), where dips should be contained to keep intact hopes of further recovery.
Above 1.0700/13 levels, next target lies at 1.0748 (Fibo 76.4%).
Conversely, return and close below daily cloud top would slow current rally and risk test of lower breakpoint at 1.0605 (daily cloud base, reinforced by Tenkan-sen line).
A number of important events, due this week, are likely to influence pair’s action, with Fed’s rate decision being in focus.
Res: 1.0700; 1.0713; 1.0748; 1.0761
Sup: 1.0670; 1.0655; 1.0641; 1.0605