The pair regained traction in late Asian/early European trading on Monday, after starting week with gap-lower on renewed trade war fears, following G7 meeting failure as President Trump pulled out of G7 joint communique.
The dollar surged to 110 barrier and pressures again key 200SMA barrier (110.16) as risk appetite returns to play ahead of historic US/North Korea summit on Tuesday.
Fresh bullish acceleration formed higher low at 109.20 and sidelined fears of further weakness, but the downside is expected to remain at risk while 200SMA caps.
Momentum is strengthening and 5/10/20MA’s returned to bullish setup, supporting the notion, as rising and thickening daily cloud continues to underpin the action.
Break and close above key 110.14/16 barriers (Fibo 61.8% of 111.39/108.11 bear-leg/200SMA), after two unsuccessful attempts last week, is needed to confirm continuation of bull-leg from 108.11 (29 May trough).
Meanwhile, strong offers at this zone may slow bulls.
Broken daily Kijun-sen offers solid support at 109.75, which should ideally contain dips and keep fresh bulls intact, while deeper downticks are expected to hold above 10SMA (109.50).
Strong negative signal could be expected on return and close below 10SMA.
Res: 110.16, 110.26, 110.62, 110.90
Sup: 109.75, 109.50, 109.30, 109.20
