The Euro holds steady on Monday and moved higher in early European trading, after trading within narrow range in Asia.
Fresh advance extends Friday’s rally and cracked daily cloud base (1.1545) and could attack next pivotal barriers at 1.1560/70 (20SMA/daily cloud top).
Friday’s recovery formed bullish outside day, which was positive signal for further upside after bears were contained at key 1.1432 support (09 Oct low) and subsequent bounce generated initial signal of double-bottom formation.
Strengthening momentum is attempting to break into positive territory on daily chart and supports, along with north-heading slow stochastic.
Bulls need to clear 20SMA and break above cloud to confirm reversal and turn near-term focus higher, however, plethora of barriers within 1.1580/1.1620 zone (55/30/100SMA / 16 Oct high / Fibo 50% of 1.1815/1.1432), could be strong obstacle.
Only sustained break above 1.1620 would confirm double-bottom and signal stronger recovery.
The downside would remain vulnerable if fresh bulls fail to close above 20SMA / daily cloud top.
Developments around Brexit and concerns over Italy’s budget plan, which was heavily criticized by the EU, are key fundamentals for the single currency, with focus turning to EU PMI data on Wednesday and the ECB’s policy meeting on Thursday.
Res: 1.1560, 1.1570, 1.1600, 1.1621
Sup: 1.1533, 1.1498, 1.1463, 1.1432
