Slobodan Drvenica
Windsor Brokers
The Euro regains momentum and bounces from dangerous zone (1.1730/40) where downside attempts failed for the third time.
Fresh acceleration higher was fuelled by better than expected PMI data from Germany and EU (German Manufacturing PMI was 59.4 in Aug vs 57.7 f/c, while EU manufacturing PMI was at 57.4 in Aug vs 56.3 f/c).
ECB’s chief Mario Draghi did not offer something substantially new in his today’s speech today, reiterating that unconventional monetary policy in past decade has been a success, however, rigorous research in gaining further knowledge about this toll is required. Draghi said that the world became more resilient after applying unconventional methods in policy and regulation.
More signals from top central bankers are expected on Jackson Hole symposium which starts on Thursday, when Draghi is due to speak.
The Euro hit new session high at 1.1789 and may extend fresh recovery action higher after triple downside rejection and failure to close below daily Tenkan-sen which acts as strong support at 1.1754.
Key near-term barriers lay at 1.1815/28 (Fibo 61.8% of 1.1910/1.1662 pullback / Mon/Tue double upside rejection) and sustained break here is needed to confirm reversal.
Overall bullish structure and political crisis in the US work in favor of Euro bulls.
Res: 1.1800; 1.1815; 1.1828; 1.1846
Sup: 1.1754; 1.1731; 1.1708; 1.1662
The information contained in this document was obtained from sources believed to be reliable, but its accuracy or completeness cannot be guaranteed. Any opinions expressed herein are in good faith, but are subject to change without notice. No liability accepted whatsoever for any direct or consequential loss arising from the use of this document.
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