EURUSD bounced on Thursday after two-day drop was strongly rejected on signals that the US Federal Reserve kept policy unchanged and signaled that the job with rate hikes is likely done, which deflated the US dollar.
Additional pressure on greenback came from higher than expected weekly jobless claims and significant drop in unit labor cost in Q3 which indicated some weakness in labor market, though clearer picture will be seen after release of October’s NFP report on Friday.
Fresh strength probed again above pivotal Fibo barrier at 1.0638 (38.2% of 1.0945/1.0448) and cracked the base of falling daily cloud (1.0664), but faced increased headwinds, as cloud is thick and weighs heavily.
Clear break above 1.0638 and penetration of daily cloud is required to confirm initial bullish signal for attack at psychological 1.0700 barrier and avoid another bull-trap above 1.0638.
Positive momentum continues to strengthen on daily chart and MA’s (10/20/30) turned to bullish setup and underpin near-term action, which needs to hold above 1.06 zone (daily Tenkan-sen) to keep bias with bulls.
Res: 1.0664; 1.0700; 1.0736; 1.0755.
Sup: 1.0605; 1.0570; 1.0516; 1.0495.