The Euro rose above parity on Tuesday, in extension of a steep upleg from 0.9631 trough (Oct 13), trading at these levels for the first time since Sep 21.
Talks that Fed may pause continue to deflate dollar in past few sessions, despite no change in rate outlook ahead of central bank’s Nov 2 policy meeting.
Break through parity zone (also Oct 4/5 double top) is strong bullish signal, which would require confirmation on close above here, as bulls already cracked next pivotal barriers at 1.0041/47 (Fibo 76.4% of 1.0197/0.9535 / base of falling daily cloud) and eye descending 100 DMA (1.0093).
Daily techs maintain strong bullish momentum and MA’s are mostly in positive setup, but bulls may face headwinds as stochastic is strongly overbought and reversing.
Dips should find firm ground above broken 55DMA to keep bulls in play and offer better buying opportunities, as failure swing pattern is forming on daily chart and the pair is on track for the first bullish monthly close in five months, with potential formation of bullish engulfing pattern on monthly chart that adds to reversal signals.
However, caution is required as larger bears are still fully in play, warning that current correction would be just a breather and price adjustment before medium-term downtrend resumes.
Res: 1.0050; 1.0093; 1.0116; 10140.
Sup: 1.0000; 0.9944; 0.9921; 0.9876.
