The pair maintains firm tone and hit new four month high in early Friday’s trading as extension of week-long bull-leg from 109.20, probed above strong Fibo barrier at 110.87 and cracked psychological 111 resistance.
Positive momentum and bullish daily MA’s configuration favor further upside as bullish signal was generated on break above 110.87 (Fibo 61.8% of 114.73/104.63 fall) and requires daily close above for confirmation.
Further bullish acceleration would extend towards weekly cloud base (111.94) and Fibo 76.4% (112.34).
The notion is supported by rise in US Treasury yields which hit the highest in nearly seven years in Asia on Friday and keep the dollar supported. Rising yields are positive signal for the strength of the US economy, which also fuels expectations for further inflation rise and could result in more aggressive Fed in 2018.
Overbought daily RSI/slow stochastic signal bulls may take a breather before continuing higher.
Broken 200SMA is reinforced by rising bull-trendline off 104.63 and expected to contain extended dips.
Res: 111.00, 111.48, 111.94, 112.34
Sup: 110.72, 110.15, 110.00, 109.86
