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On Tuesday, EURO strengthened beyond 1.30 psychological resistance against USD after rating agency Moody's Investors Service affirmed Baa3 investment grade sovereign credit rating on Spain.
As was mentioned in previous report, should the pair strengthen above 1.30 – 1.3030 resistance zone, the momentum on the upside was likely to get extended towards 1.3130 resistance zone.
On Wednesday, EURO climbed to 1.3124 against USD, the highest level after Sept. 17 ahead of a meeting of European Union leaders on Thursday and Friday. The pair is currently quoting at 1.3099, after touching 1.3124.
On the upside, the pair is likely to continue facing resistance around 1.3130 level followed by a strong resistance near 1.3170 zone, the high set on Sept. 17.
Should the pair manage to break-out beyond 1.3170 strong resistance zone, the short-term momentum for the currency pair is likely to get extended towards 1.3370 – 1.3400 zone.
On the downside, 1.30 – 1.3030 zone may now act as immediate strong support for the currency pair.
Should the pair weaken below the 1.30 psychological support now, the down-ward momentum seems to get accelerated towards 1.2920 – 1.2900 strong support zone.
Investors should watch for break-out above 1.3130 on the upside for initiating any fresh long positions and break below 1.3080 on the downside for initiating any fresh short positions.
Investors are likely to remain cautious over the near-term outlook for the currency pair as the pair may get stuck in a trading range.
Haresh Menghani
Market Analyst
Admiral Markets
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