EURUSD approaches daily cloud top as bulls were further boosted by slightly dovish Fed minutes
The Euro remains well supported and met target at1.1880 (daily Kijun-sen), approaching key barrier at 1.1893 (daily Ichimoku cloud top).
The single currency extended strong rally on Wednesday, after the minutes of Fed’s latest policy meeting showed a number of policymakers is concerned about stubbornly low inflation, looking for upcoming US CPI data to get more evidence about possible changes.
Divided views of board members regarding further tightening in light of persistently low inflation was seen by markets as slightly dovish that kept the dollar at the back foot and offered further support to the Euro.
Technical outlook has further improved on Wednesday’s fresh extension of recovery leg from 1.1669 which closed above 20 / 55 SMA’s and threatening daily cloud top which marks key near-term barrier.
Sustained lift above the cloud will be seen as strong bullish signal and shift near-term bias higher.
However, bulls may how hesitation as slow stochastic is overbought on daily chart.
Dips will be seen as buying opportunity while broken 20SMA (1.1830) holds.
From the fundamental side, release of EU Industrial Production for Aug (0.5% f/c vs 0.1% prev) and speech of ECB president Mario Draghi will be the key events for the Euro today.
Res: 1.1880; 1.1893; 1.1930; 1.1992
Sup: 1.1842; 1.1830; 1.1795; 1.1781
Author
Slobodan Drvenica
Windsor Brokers
Industry veteran with over 22 years’ experience, Slobodan Drvenica joined Windsor Brokers in 1995 when he was an active trader for more than 10 years, managing the trading desk and own account departments.
