Going forward, the break and hold above 1.03 represents a significant milestone for the combatant bulls, as it confirms the break of a lower low and lower high structure present since the sharp fall off 1.0550 on Jan 22. The upside resolution, while encouraging a shift to more buy on dips strategies, still sees a strong area of supply between 1.0350-1.0370, as per Feb 20 price action.
According to Greg McKenna, CEO at Global FX: "Looking at our usual indicators, the chances of a move toward 1.04 are now high." Short term, the analyst notes the 1.0335 high overnight as key short term resistance, saying that "the overbought nature of the 1 and 4 hour charts needs to be washed out of the market if this is to be breached." Greg adds that a decline through 1.0307 "may open up some shorter term weakness on the hourly charts." From a lower timeframe perspective, the area 1.0265-1.0280 may offer significant demand as per the impulsive reaction off it in the last European session.
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