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On Wednesday, EURO initially weakened against USD but turned-up after US ADP report and ISM services PMI came in better than expected.
On Thursday, EURO remained stuck in a range against USD as markets waited for the outcome of the ECB meeting and Spanish bond auctions today.
The pair is currently quoting hovering near 1.2930 between the ascending Fibonacci Channel resistance and the 23.6% Fibonacci Retracement Level of 1.2042 to 1.3172 July to September rally support.
On the upside, the pair is likely to continue facing strong hurdle around 1.2970 – 1.2980 zone.
Should the pair manages to strengthen above 1.2970 – 1.2980 resistance zone, the pair is likely to continue its upward momentum towards 1.3110 in the very near term. Intermediate minor resistance is seen near 1.3050 level.
On the downside immediate support for the currency pair is pegged around 1.2900 - 1.2880 zone – 38.2% retracement level of its move from 1.3975 to 1.2042, followed by a minor support around 1.2850 level.
Should the pair break below 1.2850 again, the pair is unlikely to hold support near the 200-day SMA around 1.2800 on the downside and it is likely to test 1.2740 – 1.2720 support zone, exactly where the Fibonacci cluster lies – consisting of 23.6% and 38.2% Fibonacci Retracement Level of its entire move from 1.4939 to 1.2042 and 1.2042 to 1.3172 July to September rally respectively and the ascending Fibonacci Channel support.
With important economic events scheduled for the day, we are likely to witness increased volatility for the currency pair. Further, the near-term direction for the pair is likely to be decided should the pair break above 1.2980 or below 1.2850 amid increased volatility.
Intraday Important Technical Levels
Support 1 – 1.2900 Resistance 1 – 1.2961
Support 2 – 1.2861 Resistance 2 – 1.2992
Support 3 – 1.2829 Resistance 3 – 1.3027
Haresh Menghani
Market Analyst
Admiral Markets
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