The pair marked а third consecutive day of gains as yesterday’s session ended near the highs for the day. Trading has again resumed in the range between the support at 1.0482 and the resistance at 1.0576. Recent moves suggest a test of this resistance, however, and the expectations are for an initial pullback towards 1.0482 or 1.0440. The bulls would expect better levels before they could enter the market, in order to prepare for a test and a possible breach of the resistance. With a breach of the 1.0576 zone, a more substantial rally, with targets of 1.0760 and even 1.0920, can be expected. If this scenario fails, then the bearish pressure can be expected to persist and the annual support at 1.0350 could eventually be disrupted. Today, increased activity can be expected around the announcement of the CPI data for the eurozone at 09:00 GMT.
As expected, prices below 128.70 attracted the attention of the bulls and they entered aggressively at the support of 127.48. At the moment, the market is consolidating and growth has slowed due to the weaker U.S. dollar. The first significant resistance for the bulls is 129.60. It is expected to hold or, if violated, to be short-lived. It is possible that the pair has begun sliding in a downtrend belonging to the lower time frames, but this will become clear at the end of the current consolidation. An alternative scenario is for the pair to continue trading in the wide range between 127.50 and 131.20.
The situation of the Cable resembles that of the EUR/USD. The area at around 1.2170 offered serious support to the bulls, and yesterday the rally gained momentum. It is likely that prices will retrace towards 1.2400, where the bearish pressure should remain limited. This would confirm the bullish attitudes and the change in market sentiment. The stability of the movement would be revealed after the first correction, and if the rally continues, then a test of 1.2600 can be expected. There is still no confirmation of a trend reversal and the recent gains may simply turn out to be a short position squeeze.
The German index continued to rise since the beginning of the week and prices approached the key resistance at 14315. Around this area, the bears could take action and the market might retrace towards 14110. If the bulls still manage to take over this area, then the index could extend its gains towards 14550. Significant support the bulls can currently expect at around 13870.
The U.S. blue chips tested the resistance at 32700 and a deeper pullback can be expected here. Substantial support is likely to be found at around 32190 and the bulls can expect better entry levels below 32400. If the 32700 is successfully breached, then the next target would be 33050. The market is still under bearish control and so any growth here may prove unstable. The zones at 33100 and at 34100 that belong to the higher time frames, can be noted as serious obstacles for the bulls.