The pair maintains firm bullish tone on Thursday and extends strong rally from the previous day, hitting the highest levels in past seven days and cracking key Fibo barrier at 109.36 (61.8% of larger 112.40/104.44 fall).
Iran’s rocket attack at US targets on Wednesday sparked safe-haven demand that pushed the pair to the lowest since early October, but dip proved to be short-lived.
Subsequent rally on calming geopolitical situation marked the biggest one-day advance since August and left long-tailed daily bullish candle which underpins the action. Also, completion of bear-trap pattern on daily chart, was bullish signal that was reinforced by close well above the top of thick daily cloud (spanned between 108.10 and 108.90) and close above a cluster of daily MA’s (10,55,30,20).
Early Thursday’s action holds comfortably above 109 handle and eyes recent highs at 109.70 zone (reinforced by converged 200/100WMA’s), violation of which would spark fresh extension of larger uptrend from 104.44 (2019 low, posted on 26 Aug).
North-heading daily momentum approaches the border of positive territory and eventual break would provide fresh bullish signal, as RSI and stochastic are also trending higher. Broken Fibo barrier (76.4% of 109.68/107.65) at 109.20 and diverging 20/30DMA’s (109.09/04) mark initial supports, guarding daily cloud top (108.90, reinforced by broken Fibo 61.8% and 55DMA) which is required to contain corrective dips and keep bulls intact.
Res: 109.37, 109.47, 109.70, 110.00
Sup: 109.20, 109.04, 108.90, 108.62
