EURUSD The Euro remains at the front foot on Thursday and attacking again pivotal Fibo barrier at 1.0887 (38.2% of 1.1147/1.0727 descend) which repeatedly capped the action in past two weeks.
Wednesday’s long bullish candle after two consecutive Dojis underpins, with daily close above bear-trendline from 1.1147 high and 20DMA, adding to positive signals.
However, bulls may face strong headwinds in attempts to eventually break 1.0887 barrier as momentum and RSI on daily chart are flat.
Weak German labor data add to such scenario, although the single currency reacted mildly to data (number of unemployed rose by 373K in Apr vs 76K f/c and unemployment rate jumped to 5.8%, the highest in two years).
Focus turns on EU CPI data and the ECB as central bank is expected to increase bond buying to further support the economy.
Break of 1.0887 pivot would generate positive signal for extension of recovery from 1.0727, but extension through 1.0937 (50% retracement / daily Kijun-sen) is needed to confirm reversal.
Repeated failure to break higher would keep bulls on hold for extended consolidation.
Return and close below daily Tenkan-sen (1.0811) will be bearish.
Res: 1.0887, 1.0937, 1.0986, 1.1000
Sup: 1.0851, 1.0823, 1.0811, 1.0768
