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On Monday, EURO edged higher from session low against USD helped by easing global slowdown concerns after stronger than expected Chinese data.
The pair is currently trading at 1.2955, little changed from 1.2956 on Friday.
The pair has repeatedly failed to reclaim 1.30 level even after its sharp pull-back from 1.2826 low struck on Oct. 11 (Thursday) followed by strength witnessed on Friday.
On the upside, 1.30 – 1.3030 - psychological resistance zone, is likely to continue acting as short-term hurdle for the currency pair.
Should the pair strengthen above 1.30 – 1.3030 resistance zone, the momentum on the upside is likely to get extended towards 1.3130 resistance zone.
Moreover, formation of a pennant – a continuation patter, is visible on 4-hourly charts representing a brief pause before the pair eventually break-out again in the preceding direction.
The upper trend-line resistance coincides with 1.3030 resistance area. Hence, any short-term bearish outlook for the currency pair gets negated should the pair manages to reclaim 1.30 level and strengthen above 1.30 – 1.3030 resistance zone.
On the downside, immediate support is seen near 1.2900 - 1.2880 zone representing the 23.6% Fibonacci Retracement Level.
Should the pair slip below the 23.6% retracement level support again, the pair seems unlikely to hold the very important 200-day SMA support, currently at 1.2810 level and is vulnerable to depreciate towards 38.2% Fibonacci Retracement Level near 1.2740 level on the downside.
Haresh Menghani
Market Analyst
Admiral Markets
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