The Euro stands at the front foot at the beginning of the week and accelerated higher in early hours of the European session on Monday. Fresh upside retested 20SMA at 1.2340 (also Fibo 38.2% of 1.2446/1.2272 downleg) which capped Friday’s action. The rally may extend on firm break of 1.2340 pivot, with scenario being supported by strengthening momentum on daily chart. Near-term action is underpinned by thick daily cloud (top of cloud lies at 1.2298 today) which contained Friday’s post US data dip, keeping near-term uptrend from 1.2154 trough in play. Friday’s action ended in Doji candle with today’s acceleration higher attempting to form Doji reversal pattern on daily chart and signal stronger retracement of last Thu/Fri fall. The single currency may extend recovery after US jobs data failed to spark stronger movements in the market, as positive impact from stellar US NFP figure (313K vs 200K f/c) was offset by weaker than expected wage growth. Technicals are expected to be the key driver of the Euro, as today’s economic calendar is very light. Lift above 20SMA would open next pivots at 1.2380 (Fibo 61.8% of 1.2446/1.2272) and 1.2400 (Fibo 61.8% of larger 1.2555/1.2154 descend). Bearish scenario requires penetration of daily cloud to weaken near-term structure and signal extension of the downleg from 1.2445 double-top.
Res: 1.2340, 1.2355, 1.2380, 1.2400
Sup: 1.2298, 1.2265, 1.2223, 1.2187