The pair opened with gap higher on Monday as pressure on dollar eases. Recovery met pivotal barrier at 108.60 (Fibo 38.2% of 108.66/107.31 downleg/hourly cloud top) which so far limited rally, guarding key barrier at 108.83 (weekly cloud base).
Last week’s strong acceleration lower that left long red weekly candle and closed well below weekly cloud base was strong bearish signal for further extension of broader bears.
We expect limited corrective action, with weekly cloud continuing to weigh and expected to ideally cap.
However, stronger upticks towards 109.00/15 (daily Tenkan-sen/Kijun-sen in bearish setup) could be anticipated before bears re-assert). Alternatively, sustained break above 109.39 (Fibo 61.8% of 110.66/107.31 downleg/20SMA) would sideline bears for stronger correction.
Res: 108.60, 108.83, 109.00, 109.15
Sup: 108.12, 107.78, 107.31, 107.00
