The pair maintains firm bullish tone in early Tuesday’s trading and extended strong rally on Monday (up 0.85%, the biggest one-day gain since 28 Mar) to new 2 ½ month high at 108.87.
Close above double-Fibonacci barriers at 108.25/49 on Monday was strong bullish signal for test of next targets at 109.00 (falling 100SMA) and 109.31 (daily cloud top).
The dollar continues to advance, supported by rising US yields and eventual break through 109.00/31 pivots would generate another strong bullish signal and accelerate further after triggering stops, parked above.
Bulls may take a breather before breaking above 109.00/31 barriers as slow stochastic is overbought on daily chart, but without firmer bearish signal for now.
Corrective dips are expected to offer better buying opportunities.
Daily Tenkan-sen in steep ascend continues to underpin the advance (currently at 107.78) and expected to contain extended dips.
Res: 109.00, 109.31, 109.78, 110.00
Sup: 108.66, 108.49, 108.25, 107.78
