Short Term Technical Analysis for Majors (07:00 GMT)
The single currency trades in a consolidative mode, after posting fresh high at 1.3074 yesterday. With previous high at 1.3046, protecting the downside along with ascending 20 day EMA and yesterday’s close above the latter, scope exists for attempt at initial 1.3100 target, clearance of which to open way towards key barriers at 1.3138 and 1.3170. However, further consolidative / corrective action cannot be ruled out, as 4h indicators are near overbought zone and moving sideways. Psychological 1.3000 support, also Fib 38.2% of 1.2879/1.3074 upleg and daily Ichimoku cloud top, is expected to contain any stronger pullback.
The pair maintains positive sentiment that emerged on yesterday’s break above 1.6050 congestion top and cracked initial target at 1.6100, spiking to 1.6114 so far. Shallow correction that was contained by 20 day EMA at 1.6085, keeps bulls in play for final push towards 1.6174/78 Oct / Now double-top, with interim barriers at 1.6124, Fib 61.8% of 1.6308/1.5826 and 1.6140, 26 Oct high. Overnight’s lows at 1.6085, offer immediate support, ahead of more significant 1.6050, previous resistance, reinforced by ascending 55 day EMA.
The pair comes under increased pressure, following upside rejection at 82.36, with fresh weakness attempting below 82.00 handle. Hourly studies remain negative, with 4h ones breaking into the negative territory. This increases risk of further weakness and test key near-term support and range floor at 81.68, 28 Nov low. Break here is seen as a trigger for stronger corrective action towards 81.40/00, Fibonacci support, also as confirmation of near-term double-top formation that would put near-term bulls on hold. Only bounce through yesterday’s intraday high at 82.36, would avert immediate downside risk.
The pair enters near-term consolidative phase, just above fresh low at 0.9239 and key support and near-term target at 0.9213. With hourly studies gaining traction, further sideways movements are likely, however, weak 4h structure and upside being limited by descending 20 day EMA at 0.9260 zone, does not leave much room for any significant corrective action.
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