The Euro moved higher in early European trading on Friday, boosted by EUR/JPY buying on renewed risk sentiment. Thursday’s failure close below daily cloud top, despite spike deeply in the cloud and today’s bounce, sidelined immediate downside risk on formation of reversal pattern. However, dovish ECB minutes, released on Thursday, may further affect near-term performance. Weak momentum studies and south-heading slow stochastic after reversal from overbought territory, keep the downside vulnerable, despite fresh recovery probe above a cluster of MA’s (20/30/55). On the other side, thick daily cloud continues to underpin (cloud top lies at 1.2327, reinforced by Fibo 38.2% of 1.2215/1.2396), but recovery needs to regain yesterday’s high (1.2379) to neutralize downside risk. Today’s close is expected to give fresh indication for near-term direction. Close below cloud top would signal further weakness, while bullish bias is expected to remain in play while cloud top holds.
Res: 1.2345, 1.2379, 1.2400, 1.2446
Sup: 1.2327, 1.2317, 1.2300, 1.2284
