The Euro rallied in early European trading, probing above key near-term barrier at 1.0738 (daily Kijun-sen) which capped gains in past two days.
Wednesday’s consolidation of Tuesday’s strong rally was contained by former strong barrier, now support at 1.0700, keeping near-term bulls intact.
Also, US dollar is weaker on lowered expectations on rate hike in June, which gives additional support to Euro, few days ahead of French election.
Outcome of the first round of election will be the main driver for the single currency, which is expected to come under stronger pressure in case anti-EU candidates win on Sunday.
Until then, the pair is expected to remain bid and extend gains, driven by bullish technicals and weaker dollar.
Daily close above Kijun-sen would be seen as bullish signal for extension towards 1.0776 (Fibo 61.8% of 1.0905/1.0568 descend).
Conversely, repeated close below Kijun-sen line would signal prolonged consolidation with near-term risk expected to shift lower.
Res: 1.0759, 1.0776, 1.0800, 1.0825
Sup: 1.0720, 1.0700, 1.0685, 1.0657
