The pair spiked to new two-week high at 109.20 in Asian trading on Tuesday, boosted by news that the US and China are close to reach a deal.
Recovery from 108.25 zone, where a higher base is forming, probed above important 200DMA barrier (108.93) and focusing key obstacles at 109.36/48 (Fibo 61.8% of 112.40/104.44 / 7 Nov high, the highest in nearly six months).
Fresh advance is supported by rising stochastic and MA’s in bullish setup, but still lack momentum that could cause difficulties in attempts to clearly break 200DMA.
Diverging daily Tenkan-sen / Kijun-sen (108.72/68 respectively) offer solid support which is expected to hold dips and maintain bullish bias, while break and close below would soften near-term tone and risk further easing.
Close above 200DMA would generate initial bullish signal, which requires confirmation on clear break above 108.36/48 pivots, to signal continuation of larger uptrend from 104.44 (26 Aug low).
Res: 108.93, 109.20, 109.36, 109.48
Sup: 108.87, 108.68, 108.25, 108.11
