The dollar remains steady and holding above solid supports at 109.58/51 (broken Fibo 61.8% of 110.77/107.65 / 10DMA) in European session on Thursday.
Wednesday’s pullback from the top of strong rally following US inflation report, sparked by signals of possible intervention of the Bank of Japan, was strongly rejected after markets realized that intervention is for now unlikely.
The greenback kept fresh bullish tone, regained after hotter than expected inflation in August, revived expectations that Fed will remain on track for another 0.75% hike, with some hints of being even more aggressive in the policy meeting next week.
This offers fresh support to the US currency, along with daily techs, now returned to full bullish setup and the action underpinned by Tuesday’s large bullish daily candle.
Repeated close above broken Fibo level and 10 DMA to re-confirm bullish stance and keep focus at the upside, with immediate target at 110.03 (Fibo 76.4%) and key barrier at 110.77 (new 20-year high posted on Sep 7).
Res: 109.89; 110.03; 110.53; 110.77.
Sup: 109.51; 109.21; 109.09; 108.84.
