The dollar regained traction and bounced above daily cloud (112.67/112.46) in European trading on Monday, after weak opening and spike to 112.14 in Asia.
Dip probed below daily cloud base and was contained by 100SMA (112.26), with subsequent bounce marking the fourth failure to clearly break below 112.45 pivot (Fibo 61.8% of 111.37/114.20 / daily cloud base).
This could be a bullish signal, which needs close above daily cloud as minimum requirement to keep downside risk sidelined.
Further advance would need to clear a cluster of daily MA’s between 113.05 and 113.24, to neutralize bears and generate stronger bullish signal.
The dollar remains bid on rising tensions between the US and China, with limited impact on weaker than expected US jobs data.
Long tails on today’s / last Thursday’s daily candles support the notion, however, caution is required as momentum on daily chart is weakening and overall structure is bearish.
Negative scenario on close below 112.45 pivot requires extension and close below 100SMA for confirmation, which would unmask initial support at 112.04 (Fibo 76.4% and risk extension towards 111.37 (26 Oct trough).
Res: 112.79, 113.05, 113.24, 113.65
Sup: 112.67, 112.45, 112.26, 112.04
