The cross firmed on Thursday after Wednesday’s close in red but continues to face headwinds at 0.8850 barrier (50% retracement of 0.9498/0.8202), as the action failed to break clearly higher in three consecutive attempts.
Technical studies on daily chart show rising positive momentum and MA’s in full bullish setup, underpinning the action, though overbought conditions may reduce the pace and keep the pair in extended consolidation.
Immediate bullish stance is expected to remain intact while the price holds above rising 10DMA (0.8787) that will keep the upside in focus.
Sustained break of pivotal barriers at 0.8850/66 (Fibo / Oct 12 lower top) is needed to generate signal of bullish continuation and expose targets at 0.9000 zone (psychological / Fibo 61.8% of 0.9498/0.8202).
Large bullish monthly candle of December (the pair was up 2.5%) completes reversal signal on monthly chart and helps bulls to tighten grip, as monthly studies are firmly bullish and bode well for further gains.
The ECB is expected to continue raising interest rates by 50 basis points in February and March that would add to positive outlook for Euro.
Res: 0.8850; 0.8866; 0.8895; 0.9000
Sup: 0.8826; 0.8787; 0.8713; 0.8697
