The Euro holds positive sentiment and bounced to 1.2038 on Thursday, after limited impact from encouraging Fed minutes, released late Wednesday.
Fed policymakers backed continued gradual rate hikes, in expectations for faster inflation from tax cut. However, concerns of failure of inflation to reach 2% projection exist and may slow rate hike process.
Initial support at 1.2000 holds for the third day, after Wednesday’s close in red, keeping immediate focus at the upside, as underlying bull-trend remains intact. However, deeper correction cannot be ruled out as slow stochastic is reversing from overbought territory.
Break below 1.2000 handle would expose next strong supports at 1.1961/50 (former top of 27 Nov/Fibo 38.2% of 1.1737/1.2081 upleg, reinforced by rising 10SMA) which is expected to hold extended dips.
Friday’s releases from EU (CPI) and US (NFP) are in near-term focus for fresh signals.
Res: 1.2038, 1.2066, 1.2092, 1.2166
Sup: 1.2000, 1.1961, 1.1950, 1.1900
