The cross rallies strongly on Tuesday and is on track to fully reverse Monday’s pullback.
Weaker yen helps the fresh Euro bulls, inflated by strong Manufacturing PMI data today, which offset negative Services PMI reading.
Focus turns towards Thursday’s ECB meeting and hopes of QE tapering (expectations for 25-30 billion Euros a month reduction) which would further boost the single currency. Bulls eye 22 Sep peak at 134.40 (the highest since Nov 2015) for retest, with break here to trigger fresh extension of wave C from 114.84 (16 Apr trough) which is part of broader five-wave sequence from 109.38 (24 June 2016 low), towards its Fibonacci 138.2% expansion at 135.19.
Ascending 10SMA marks solid support at 133.02, followed by 20 SMA at 132.73, loss of which will be bearish.
Res: 134.12; 134.40; 134.57; 135.19
Sup: 133.79; 133.52; 133.02; 132.73
