- Yesterday the euro took the lead against a weaker USD pushing the currency pair to highs of 1.2682 after bouncing off 1 big figure from session lows of1.2583.Tuesday we said: “It looks like there is little resistance ahead of 1.2700 and thus we expect that follow through buying will likely push price action to this level intraday. Beyond 1.27 next resistance seen at 1.2715 both levels are respectively 30th September and 29th September highs. To the downside 1.2575/1.2550 should provide initial support. Our preferred scenario is for another attempt higher before resuming the downside.”
Today the pair has traded in the range 1.2622:1.2683. In the immediate a retest of the highs seen during the Asian session looks likely with a second target of 1.2720 if the bullishness continues. 1.2720 is the 38.20% Fibonacci extension of the up move seen last Monday. To the downside 1.2580:1.2620 should provide support. The release of the minutes of the last Fed Meeting this evening will likely provide some motivation. Take a wider view of the currency’s move it looks like we are in the consolidation phase after the USD’s gains made till last Friday before the longer term bearishness resumes. For today we prefer taking a neutral stance and expect much of the trading to stay between 1.2580:1.2720.