The dollar regains traction and bounces from five-week low on Thursday, following repeated failure at pivotal Fibo support at 101.13 (38.2% of $98.55/$102.72), with repeated close above this level, to form a bear trap and generate initial bullish signal.
Near term sentiment improves after the greenback was hit by results of US midterm election, however more work at the upside will be required to neutralize existing downside risk.
Recovery needs to cover Wednesday’s gap to revive bulls, with extension above converged 10/20DMA’s (101.72/76) to confirm and shift near term focus to the upside.
Positive signal is also developing on a false break below recent range floor (repeated close above 101.25 required).
Alternative scenario sees firm break of 101.13 Fibo support as a trigger of deeper decline that would unmask supports at 100.64 (50% retracement, reinforced by 55DMA), 100.53 (100DMA) and 100.14/00 (Fibo 61.8% / psychological) in extension.
Res: 101.70; 101.95; 102.30; 102.72
Sup: 101.13; 101.00; 100.64; 100.14
