FXStreet (Buenos Aires) – The common currency advanced for a fifth consecutive day against the greenback, closing the day above the 1.1000 level for the first time since late July, advancing despite the dollar trades near this year highs against most of its rivals. There was no initial catalyst for these last days’ rally, but tepid US employment data and comments from FED’s officers, suggesting the Central Bank will stay on hold in its upcoming September meeting, fueled the advance.
Daily basis, the pair has posted a lower low and a lower high, and even closed higher, despite dollar’s broad strength on Chinese decision to devaluate the Yuan during the past Asian session, sending all hell broke loose in worldwide equities. The technical picture is favoring further advances intraday, particularly with the price challenging the 1.1040/50 region, a critical static resistance level, as the pair has stalled around it several times over the last few months. But can the rally last?
Indeed it can extend in the short term, but the pair also has a critical resistance level around 1.1120, where it not only stalled last week, but many times ever since bottoming around 1.0460 earlier this year. According to Valeria Bednarik, FXStreet chief analyst, the level is the line in the sand for bears, with large stops aligned above it, which means some follow through beyond the level will see the rally actually extending, with chances to reach the 1.1435 level, last March high. Nevertheless, the pair may correct some over the upcoming sessions, with this Tuesday low of 1.0960 being the key support to break to confirm further declines towards the 1.0860 region. Further slides below this last expose the base of these last months’ range at 1.0800. Only below this last bears will retake control over the pair, with the next target then in the 1.0650 region.
(Market News Provided by FXstreet)